UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-23100
BERNSTEIN FUND, INC.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Stephen M. Woetzel
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (800) 221-5672
Date of fiscal year end: September 30, 2023
Date of reporting period: September 30, 2023
ITEM 1. REPORTS TO STOCKHOLDERS.
BERNSTEIN FUND, INC.
Small Cap Core Portfolio
International Small Cap Portfolio
International Strategic Equities Portfolio
ANNUAL REPORT
SEPTEMBER 30, 2023
Table of Contents
Before investing in any portfolio of the Bernstein Fund, Inc., a prospective investor should consider carefully the portfolio’s investment objectives and policies, charges, expenses and risks. These and other matters of importance to prospective investors are contained in the portfolios’ prospectus, an additional copy of which may be obtained by visiting our website at www.Bernstein.com and clicking on “Investments”, found in the footer, then “Mutual Fund Information—Prospectuses, SAIs and Shareholder Reports” or by calling your financial advisor or by calling Bernstein’s mutual fund shareholder help line at 212.756.4097. Please read the prospectus carefully before investing.
For performance information current to the most recent month-end, please call (collect) 212.486.5800.
This shareholder report must be preceded or accompanied by the Bernstein Fund, Inc. prospectus for individuals who are not shareholders of the Fund.
You may obtain a description of the Fund’s proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit www.AllianceBernstein.com, or go to the Securities and Exchange Commission’s website at www.sec.gov, or call AllianceBernstein at 800.227.4618.
The Fund will file its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the Commission’s website at www.sec.gov.
Investment Products Offered: · Are Not FDIC Insured · May Lose Value · Are Not Bank Guaranteed
Portfolio Manager Commentary (Unaudited)
To Our Shareholders—November 15, 2023
On the following pages, you will find the 2023 annual report for the Portfolios (collectively, the “Portfolios”, and individually, a “Portfolio”) of the Bernstein Fund, Inc. (the “Bernstein Fund”). The annual report covers the six- and 12-month periods ended September 30, 2023, and includes financial statements as well as notes to the financial statements, information about the recent performance of the Portfolios and a listing of each Portfolio’s holdings as of the period end.
What a difference a year makes. When we sent out our update a year ago, the stock market was touching its lowest point in almost two years. Since then, it’s rallied strongly, even in the face of numerous scary headlines, from a crisis in several regional banks to the debt ceiling and government shutdown standoffs.
The economy, too, remains strong—perhaps even surprisingly so. Inflation has steadily tracked lower, though it remains above the Fed’s target. After-inflation wage growth has turned from negative to positive and the aggregate paycheck for American workers has risen steadily as that wage growth has combined with more workers returning to the workforce and finding jobs. That’s eased the pressure in the labor market without disrupting it. In fact, while we can’t say for sure that a “soft landing” lies ahead for the economy, it certainly has been on that path for the past two or three quarters.
In our spring update, we wrote about the dollar weakening after an incredible rise in value against other currencies in 2022. That weakening has reversed somewhat in the past six months, but the dollar remains down around 5% over the past year.
Global equities have risen around 20% over the past twelve months. Part of that has come from a reversal in sentiment after last fall’s lows. Part has come from a combination of hope and hype surrounding artificial intelligence and trillions of dollars of value being added to the stocks of a few leading US technology companies.
Bonds have been more challenged, as persistent economic strength has led to further interest rate increases by the Federal Reserve and other central banks and led the market to anticipate better growth and higher rates over the medium to long term. That has driven 10-year Treasury bond yields up by 0.75 percentage points to 4.57%, with most of that move happening in August and September.
Our portfolio managers continue to track both the opportunities and the risks to the economy and market from here. We’re watching for any signs of economic acceleration or deceleration that could drive interest rates higher or foreshadow an upturn or downturn in the economy, monitoring the situation in Israel and Gaza for any signs of outward expansion, and keeping an eye on China’s actions to support its economy. These managers will constantly adjust portfolios to incorporate the latest information.
Thank you for your continued confidence in our approach.
If you have any questions about your investments in the Portfolios, please contact your Bernstein Advisor by calling 212.756.4097, or visit www.Bernstein.com. As always, we are firmly dedicated to your investment success.
Sincerely,
Alexander Chaloff
President
Bernstein Fund, Inc.
Small Cap Core Portfolio
Investment Objectives and Strategy
The Portfolio seeks to provide long-term growth of capital. The Portfolio invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of small-capitalization companies or other securities or instruments with similar economic characteristics, including derivatives related to equity securities. Equity securities are primarily common stocks, although, for purposes of the 80% policy, equity securities may also include preferred stocks, warrants, convertible securities, sponsored or unsponsored American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) and equity real estate investment trusts (“REITs”). You will be notified at least 60 days prior to any change to the Portfolio’s 80% investment policy.
(Portfolio Manager Commentary continued on next page)
Portfolio Manager Commentary (continued)
AllianceBernstein L.P. serves as the Portfolio’s investment manager (the “Adviser”). The Adviser invests the assets of the Portfolio primarily in a diversified portfolio of equity securities of small-capitalization companies located in the US. The Portfolio defines small-capitalization companies as those that, at the time of investment, fall within the capitalization range between the smallest company in the Russell 2000 Index (“Russell 2000”) and the largest company in the Russell 2000. The market capitalization of the companies included in the Portfolio’s definition of “small-capitalization” companies changes over time as the capitalization of the securities included in the Russell 2000 changes.
The Adviser utilizes both quantitative analysis and fundamental research to determine which securities will be held by the Portfolio and to manage risk. The Adviser applies quantitative analysis to all of the securities in the Portfolio’s research universe, which is composed primarily of securities in the Portfolio’s benchmark. Those securities that score highly on this quantitative analysis are then screened to eliminate those securities that the Adviser is recommending against purchasing based on its fundamental research, and a portfolio is constructed from the remaining highly ranked securities based on diversification and risk considerations. In its quantitative analysis, the Adviser considers a number of metrics that have historically provided some indication of favorable future returns, including metrics relating to valuation, quality, investor behavior and earnings growth. In general, stocks are purchased when, in the view of the Adviser, they provide the highest expected returns, considering their contribution to the estimated risk of the Portfolio’s existing investments. Typically, growth in the size of a company’s market capitalization relative to other domestically traded companies does not cause the Adviser to dispose of the security. The Adviser expects to seek to manage the overall portfolio volatility of the Portfolio relative to the Russell 2000 by favoring securities that offer the best balance between return and targeted risk.
The Portfolio may also invest in exchange-traded funds (“ETFs”) and other investment companies from time to time.
The Portfolio expects to utilize derivatives, such as options, futures contracts, forwards and swaps. For example, the Portfolio may use stock index futures contracts to equitize cash. Derivatives may provide a more efficient and economical exposure to market segments than direct investments, and may also be a more efficient way to alter the Portfolio’s exposure.
Investment Results
The table on page 10 shows the Portfolio’s performance compared with its benchmark, the Russell 2000 Index, for the six- and 12-month periods ended September 30, 2023. The table also includes the Portfolio’s peer group, as represented by the Lipper Small-Cap Core Funds Average (the “Lipper Average”). Funds in the Lipper Average have generally similar investment objectives to the Portfolio, although some of the funds may have different investment policies and sales and management fees and fund expenses.
During the 12-month period, all share classes of the Portfolio outperformed the benchmark and Lipper Average, with SCB Class shares ending the period with an increase of 14.07% versus 8.93% for the Russell 2000 Index and 12.77% for the Lipper Average. Also, during the six-month period, all share classes of the Portfolio outperformed against the benchmark and Lipper Average, with SCB Class shares returning 1.78% versus the Russell 2000 Index decline of 0.19% and flat performance of the Lipper Average.
The US small-cap market increased during the current reporting period as the year began with moderating expectations of US Federal Reserve interest rate increases. Many central banks around the globe increased rates by less than expected and a softer-than-expected Consumer Price Index and Purchasing Managers’ Index gave investors optimism that rate increases would moderate. Additionally, China’s curtailment of its zero-COVID policy initially raised hopes of support to the global economy. Later in the year, renewed labor market strength, less traction from a rebounding Chinese economy than expected and the threat of US government default raised doubts of a well-orchestrated soft landing.
The Portfolio continues to maintain strategic exposures to attractive valuation, high-profitability and positive-sentiment stocks, which tend to outperform over the long-term. During the 12-month reporting period, the Portfolio’s exposure to securities that were larger than the benchmark on average, with high asset turnover and with attractive valuation contributed to performance, relative to the benchmark. Exposure to stock price momentum, profitability and investor sentiment detracted. Sector selection contributed due to an overweight to industrials and technology, while an underweight to health care and an overweight to energy detracted. Security selection was also positive, as selection within financials and industrials contributed, while selection within health care and consumer staples detracted.
(Portfolio Manager Commentary continued on next page)
Portfolio Manager Commentary (continued)
The Portfolio used derivatives in the form of futures for hedging purposes, which detracted for the six-month period but contributed for the 12-month period.
International Small Cap Portfolio
Investment Objective and Strategy
The Portfolio seeks to provide long-term growth of capital. The Portfolio invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of small-capitalization companies or other securities or instruments with similar economic characteristics, including derivatives related to equity securities. Equity securities are primarily common stocks, although, for purposes of the 80% policy, equity securities may also include preferred stocks, warrants, convertible securities, sponsored or unsponsored ADRs and GDRs and equity REITs. You will be notified at least 60 days prior to any change to the Portfolio’s 80% investment policy.
AllianceBernstein L.P. serves as the Portfolio’s Adviser. The Adviser invests the assets of the Portfolio primarily in a diversified portfolio of equity securities of small-capitalization companies located outside of the United States. Under normal circumstances, at least 65% of the Portfolio’s net assets are invested in companies located outside of the United States. The Portfolio defines small-capitalization companies as those that, at the time of investment, have market capitalizations within the market capitalization range of the Portfolio’s benchmark, the Morgan Stanley Capital International (“MSCI”) All Country World Index (“ACWI”) ex USA Small Cap Index. The market capitalization of the companies included in the Portfolio’s definition of “small-capitalization” companies changes over time as the capitalization of the securities included in the MSCI ACWI ex USA Small Cap changes.
The Portfolio’s exposure to non-US companies may change over time based on the Adviser’s assessment of market conditions and the investment merit of non-US issuers. Under normal circumstances, the Adviser invests in companies located in at least three countries other than the United States and expects to have exposure to issuers in several different countries. In determining a company’s location for purposes of the Portfolio’s investment policies and restrictions, the Adviser may consider: (1) the place of domicile, (2) where the company has an established presence and conducts its business and (3) where the company conducts a significant part of its economic activities. The Portfolio may invest in both developed and emerging-market countries and, at times, may invest significantly in emerging markets.
The Adviser seeks to identify attractive investment opportunities primarily through its fundamental investment research or quantitative analysis. In applying its fundamental research, the Adviser generally seeks to identify companies that possess both attractive valuation and compelling company- and/or industry-level investment catalysts. In applying its quantitative analysis, the Adviser typically considers a number of metrics that historically have provided some indication of favorable future returns, including metrics related to valuation, quality, investor behavior and corporate behavior. Utilizing these resources, the Adviser expects to allocate the Portfolio’s assets among issuers, industries and geographic locations to attempt to create a diversified portfolio of investments.
The Portfolio may invest in established companies and also in new and less-seasoned issuers. The Portfolio may also invest in ETFs and other investment companies from time to time.
The Portfolio expects to utilize derivatives, such as options, futures contracts, forwards and swaps. For example, the Portfolio may invest in currency derivatives as discussed below and in futures contracts to gain exposure to certain markets. Derivatives may provide a more efficient and economical exposure to market segments than direct investments, and may also be a more efficient way to alter the Portfolio’s exposure.
Fluctuations in currency exchange rates can have a dramatic impact on the returns of foreign equity securities. The Adviser may employ currency hedging strategies, including the use of currency-related derivatives, to seek to reduce currency risk in the Portfolio, but it is not required to do so. The Adviser may also take long and short positions in currencies or related derivatives for investment purposes, independent of any security positions. The Adviser may use stock index futures contracts to gain access to certain markets.
Investment Results
The table on page 11 shows the Portfolio’s performance compared with its benchmark, the MSCI ACWI ex USA Small Cap (net), for the six- and 12-month periods ended September 30, 2023. The table also includes the Portfolio’s peer group, as represented by the Lipper International Small/Mid-Cap Core Funds Average. Funds in the Lipper Average have generally similar investment objectives to the Portfolio, although some of the funds may have different investment policies and sales and management fees and fund expenses.
For the 12-month period, all share classes of the Portfolio outperformed the benchmark and underperformed the Lipper
(Portfolio Manager Commentary continued on next page)
Portfolio Manager Commentary (continued)
Average. Stock and sector selection, as well as country allocation contributed, relative to the benchmark, while currency exposures detracted from overall returns. Security selection within communication services, consumer discretionary and industrials contributed significantly due to strong earnings growth. There were no significant detractors during the period.
Over the six-month period, all share classes of the Portfolio underperformed the benchmark and the Lipper Average. Stock selection within real estate and energy detracted from relative performance, while continued worries around office properties and rising energy prices was a headwind offsetting stronger stock selection within the communications services sector. Country selection contributed to relative returns due to an overweight to Japan and an underweight to China. The Portfolio’s Senior Investment Management Team continued to manage currency exposure to be neutral, which has helped to reduce detraction from currency.
The Portfolio used derivatives in the form of currency forwards for hedging purposes, which had no material impact on absolute performance for the six-month period, and detracted for the 12-month period.
International Strategic Equities Portfolio
Investment Objective and Strategy
The Portfolio seeks to provide long-term growth of capital. The Portfolio invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities or other securities or instruments with similar economic characteristics, including derivatives related to equity securities. Equity securities are primarily common stocks, although, for purposes of the 80% policy, equity securities may also include preferred stocks, warrants, convertible securities, sponsored or unsponsored ADRs and GDRs and equity REITs. You will be notified at least 60 days prior to any change to the Portfolio’s 80% investment policy.
AllianceBernstein L.P. serves as the Portfolio’s Adviser. The Adviser invests the assets of the Portfolio primarily (under normal circumstances, at least 65% of net assets) in equity securities of issuers in countries that make up the MSCI ACWI ex USA, which includes both developed- and emerging-market countries. The Portfolio focuses on securities of large-cap and mid-cap companies. The Adviser expects to allocate fund assets among issuers in many foreign countries, but not necessarily in the same proportion that the countries are represented in the MSCI ACWI ex USA and may invest in issuers in countries outside of the MSCI ACWI ex USA. The Portfolio’s exposure among non-US countries may change over time based on the Adviser’s assessment of market conditions and the investment merit of particular non-US issuers. Under normal circumstances, the Adviser invests in companies located in at least three countries other than the United States and expects to have exposure to issuers in several different countries. In determining a company’s location for purposes of the Portfolio’s investment policies and restrictions, the Adviser may consider: (1) the place of domicile, (2) where the company has an established presence and conducts its business and (3) where the company conducts a significant part of its economic activities. The Portfolio may, at times, invest significantly in emerging markets.
The Adviser utilizes both fundamental and quantitative research to both determine which securities will be held by the Portfolio and to manage risk. In applying its quantitative analysis, the Adviser considers a number of metrics that have historically provided some indication of favorable future returns, including metrics relating to valuation, quality, investor behavior and corporate behavior. Utilizing these resources, the Adviser expects to allocate the Portfolio’s assets among issuers, industries and geographic locations to attempt to create a diversified portfolio of investments.
The Portfolio may also invest in ETFs and other investment companies from time to time.
The Portfolio expects to utilize derivatives, such as options, futures contracts, forwards and swaps. For example, the Portfolio may invest in currency derivatives as discussed below and in futures contracts to gain exposure to certain markets. Derivatives may provide a more efficient and economical exposure to market segments than direct investments, and may also be a more efficient way to alter the Portfolio’s exposure.
Fluctuations in currency exchange rates can have a dramatic impact on the returns of foreign equity securities. The Adviser may employ currency hedging strategies, including the use of currency-related derivatives, to seek to reduce currency risk in the Portfolio, but it is not required to do so. The Adviser may also take long and short positions in currencies or related derivatives for investment purposes, independent of any security positions. The Adviser may use stock index futures contracts to gain access to certain markets.
Investment Results
The table on page 12 shows the Portfolio’s performance compared with its benchmark, the MSCI ACWI ex USA (net),
(Portfolio Manager Commentary continued on next page)
Portfolio Manager Commentary (continued)
for the six- and 12-month periods ended September 30, 2023. The table also includes the Portfolio’s peer group, as represented by the Lipper International Multi-Cap Core Funds Average. Funds in the Lipper Average have generally similar investment objectives to the Portfolio, although some of the funds may have different investment policies and sales and management fees and fund expenses.
During the 12-month period, all share classes of the Portfolio underperformed the benchmark and the Lipper Average. Sector selection was negative, relative to the benchmark, mainly from an underweight to the financials sector, which outperformed on higher interest rates. Country selection was positive, as overweights to Denmark, Spain and Zambia contributed, while an underweight to Canada detracted. Stock selection was negative, impacted by the underperformance of Chilean lithium producer Sociedad Química y Minera de Chile on weaker lithium prices, UK tobacco company BAT, which saw profit-taking after a strong 2022 and a number of Chinese holdings given the slowing post-COVID reopening trend.
During the six-month period, all share classes of the Portfolio similarly underperformed the benchmark and the Lipper Average. Sector selection was positive, helped by an underweight to the communications services sector, which underperformed as many Chinese internet companies came under pressure. Country selection was also positive, due to an overweight to Japan, which is benefiting from a weak yen, better earnings growth and improved corporate governance; and underweights to Hong Kong and Canada, which underperformed. Stock selection was negative, due to the underperformance of luxury names LVMH Moët Hennessy Louis Vuitton and Burberry, and also detractions from the technology and materials sectors.
The Portfolio used derivatives in the form of currency forwards for hedging purposes, which added to absolute returns for the six-month period, and detracted for the 12-month period.
Disclosures and Risks (Unaudited)
Benchmark Disclosures
None of the following indices or averages reflects fees and expenses associated with the active management of a mutual fund portfolio. The Russell 2000® Index measures the performance of the small-cap segment of the US equity universe. The MSCI ACWI ex USA Small Cap (net) measures the performance of the small-cap market segment across 22 of 23 developed markets (excluding the US) and 24 emerging-market countries. The MSCI ACWI ex USA (net, free float-adjusted, market capitalization weighted) represents the equity market performance of developed and emerging markets, excluding the United States. MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices, any securities or financial products. This report is not approved, reviewed or produced by MSCI. Net returns include the reinvestment of dividends after deduction of non-US withholding tax. Investors cannot invest directly in an index, and their results are not indicative of the performance for any specific investment, including the Portfolios.
A Word About Risk
All Portfolios:
The share price of the Portfolios will fluctuate and you may lose money. There is no guarantee that the Portfolios will achieve their investment objectives.
Cybersecurity Risk: As the use of the internet and other technologies has become more prevalent in the course of business, the Portfolios have become more susceptible to operational and financial risks associated with cybersecurity. Cybersecurity incidents can result from deliberate attacks such as gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption, or from unintentional events, such as the inadvertent release of confidential information. Cybersecurity failures or breaches of the Portfolios or their service providers or the issuers of securities in which the Portfolios invest have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, the inability of Portfolio shareholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs. While measures have been developed which are designed to reduce the risks associated with cybersecurity, there is no guarantee that those measures will be effective, particularly since the Portfolios do not control the cybersecurity defenses or plans of their service providers, financial intermediaries and companies in which they invest or with which they do business.
Cybersecurity incidents, both intentional and unintentional, may allow an unauthorized party to gain access to Portfolio or shareholder assets, Portfolio or customer data (including private shareholder information), or proprietary information, or cause a Portfolio, the Adviser, and/or the Portfolios’ service providers (including, but not limited to, fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality, or prevent Portfolio investors from purchasing, redeeming or exchanging shares or receiving distributions. A Portfolio and the Adviser have limited ability to prevent or mitigate cybersecurity incidents affecting third-party service providers. Cybersecurity incidents may result in financial losses to such Portfolio and its shareholders, and substantial costs may be incurred in order to prevent any future cybersecurity incidents.
Sector Risk: The Portfolios may have more risk because of concentrated investments in a particular market sector, such as the financials, consumer discretionary, information technology or industrials sector. Market or economic factors affecting that sector could have a major effect on the value of the Portfolios’ investments.
Market Risk: The Portfolios are subject to market risk, which is the risk that stock prices in general or in particular countries or sectors may decline over short or extended periods. Stock prices may decline in response to adverse changes in the economy or the economic outlook; deterioration in investor sentiment; interest-rate, currency and commodity price fluctuations; adverse geopolitical, social or environmental developments; issuer- and sector-specific considerations; public health crises (including the occurrence of a contagious disease or illness) and regional and global conflicts; cybersecurity events; market disruptions caused by tariffs; trade disputes; measures to address budget deficits; downgrading of sovereign debt; sanctions or other government actions; and other factors.
Economies and financial markets throughout the world are becoming increasingly interconnected. Economic, financial or
(Disclosures and Risks continued on next page)
Disclosures and Risks (continued)
political events, trading and tariff arrangements, armed conflict, including Russia’s military invasion of Ukraine, terrorism, natural disasters (including the spread of infectious illness) and other circumstances in one country or region could have profound impacts on global economies or markets. Following Russia’s recent invasion of Ukraine, the United States, the European Union and the regulatory bodies of certain other countries instituted numerous sanctions against certain Russian individuals and Russian entities. These sanctions, and other intergovernmental actions that may be undertaken against Russia in the future, may result in the devaluation of Russian currency, a downgrade in the country’s credit rating, and a decline in the value and liquidity of Russian stocks. These sanctions could result in the immediate freeze of Russian securities, including securities in the form of ADRs, impairing the ability of the Portfolios to buy, sell, receive or deliver those securities. Retaliatory action by the Russian government could involve the seizure of US and/or European residents’ assets and any such actions are likely to impair the value and liquidity of such assets. The continued disruption of the Russian economy has had severe adverse effects on the region and beyond, including significant negative impacts on the markets for certain securities and commodities, such as oil and natural gas, as well as other sectors. As a result, whether or not the Portfolios invest in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the Portfolios’ investments may be negatively affected.
Illiquid Investments Risk: Illiquid investments risk exists when particular investments are difficult or impossible to purchase or sell, possibly preventing the Portfolios from purchasing or selling these securities at an advantageous price. In certain cases, governmental actions could prevent sales of securities or repatriation of proceeds. Illiquid securities may also be difficult to value. If the Portfolios are forced to sell an illiquid asset to meet redemption requests or other cash needs, or to try to limit losses, the Portfolios may be forced to sell at a substantial loss or may not be able to sell at all.
Redemption Risk: The Portfolios may experience heavy redemptions that could cause the Portfolios to liquidate their assets at inopportune times or unfavorable prices or increase or accelerate taxable gains or transaction costs and may negatively affect the Portfolios’ net asset value, or performance, which could cause the value of your investment to decline. Redemption risk is heightened during periods of overall market turmoil.
Capitalization Risk: Investments in small- and mid-capitalization companies may be more volatile than investments in large-capitalization companies. Investments in small- and mid-capitalization companies may have additional risks because these companies may have limited product lines, markets or financial resources. The prices of securities of small- and mid-capitalization companies generally are more volatile than those of large-capitalization companies and are more likely to be adversely affected than large-capitalization companies by changes in earnings results and investor expectations or poor economic or market conditions, including those experienced during a recession. Securities of small- and mid-capitalization companies may underperform large-capitalization companies, may be harder to sell at times or at prices the portfolio managers believe appropriate and may have greater potential for losses.
Allocation Risk: The Portfolios may seek to focus on different investment disciplines or factors at different times as a means to achieve their investment objectives. In the event that the investment disciplines or factors to which the Portfolios have greater exposure perform worse than the investment disciplines or factors with less exposure, the Portfolios’ returns may be negatively affected.
Derivatives Risk: The Portfolios may use derivatives in currency hedging as well as for direct investments to gain access to certain markets, earn income, enhance return and broaden portfolio diversification, which entail greater risk than if used solely for hedging purposes. While hedging can guard against potential risks, there is also a risk that a derivative intended as a hedge may not perform as expected. In addition to other risks such as the credit risk of the counterparty, derivatives involve the risk that changes in the value of the derivative may not correlate with relevant assets, rates or indices. Derivatives may be difficult to price or unwind, and small changes may produce disproportionate losses for the Portfolios. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying instrument, which could cause the Portfolios to suffer a (potentially unlimited) loss. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. Assets required to be set aside or posted as margin or collateral for derivatives positions may themselves go down in value, and these collateral and other requirements may limit investment flexibility. Some derivatives involve leverage, which can make the Portfolios more volatile and can compound other risks. Derivatives, especially over-the-counter
(Disclosures and Risks continued on next page)
Disclosures and Risks (continued)
derivatives, are also subject to counterparty risk, which is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable or unwilling to honor its contractual obligations to the Portfolios. The US government and certain foreign governments have adopted regulations governing derivatives markets, including mandatory clearing of certain derivatives as well as additional regulations governing margin, reporting and registration requirements. The ultimate impact of the regulations remains unclear. Additional regulation may make derivatives more costly, limit their availability or utility, otherwise adversely affect their performance, or disrupt markets.
Management Risk: The Portfolios are subject to management risk because they are actively managed investment portfolios. The Adviser will apply its investment techniques and risk analyses in making investment decisions for the Portfolios, but these techniques, analyses and decisions may not work as intended or may not produce the desired results, and may, during certain periods, result in increased volatility for the Portfolios or cause the value of the Portfolios’ shares to go down. In some cases, derivatives and other investment techniques may be unavailable, or the Adviser may determine not to use them, possibly even under market conditions where their use could benefit the Portfolios. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise perform as expected. In addition, the Adviser may change the Portfolios’ investment strategies or policies from time to time. Those changes may not lead to the results intended by the Adviser and could have an adverse effect on the Adviser and could also have an adverse effect on the value or performance of the Portfolios.
Real Estate Related Securities Risk: Investing in real estate related securities includes, among others, the following risks: possible declines in the value of real estate; risks related to general and local economic conditions, including increases in the rate of inflation; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition, property taxes and operating expenses; changes in zoning laws; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; uninsured damages from floods, earthquakes or other natural disasters; limitations on and variations in rents; and changes in interest rates. In addition, global climate change may have an adverse effect on property and security values and may exacerbate the risks of natural disasters. The COVID-19 pandemic has also impacted certain real estate sectors by accelerating the trend towards online shopping and remote-working environments. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, are not diversified, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. Investing in REITs also involves risks similar to those associated with investing in small-capitalization companies. REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. REIT issuers may also fail to maintain their exemptions from investment company registration or fail to qualify for the “dividends paid deduction” under the Internal Revenue Code of 1986, as amended.
Investment in Other Investment Companies Risk: As with other investments, investments in other investment companies, including other registered funds advised by the Adviser and ETFs, are subject to market and management risk. The market value of the shares of other investment companies and ETFs may differ from their net asset value. In addition, if the Portfolios acquire shares of investment companies, shareholders bear both their proportionate share of expenses in the Portfolios (including management and advisory fees) and, indirectly, the expenses of the investment companies in which the Portfolios invest.
International Small Cap and International Strategic Equities Portfolios
Foreign (Non-US) Securities Risk: Investments in foreign securities entail significant risks in addition to those customarily associated with investing in US securities, such as less liquid, less transparent, less regulated and more volatile markets. These risks include risks related to unfavorable or unsuccessful government actions, reduction of government or central bank support, economic sanctions and potential responses to those sanctions, inadequate accounting standards and auditing and financial recordkeeping requirements, lack of information, social instability, armed conflict, and other adverse market, economic, political and regulatory factors, all of which could disrupt the financial markets in which the
(Disclosures and Risks continued on next page)
Disclosures and Risks (continued)
Portfolios invest and adversely affect the value of the Portfolios’ assets.
Country Concentration Risk: The Portfolios may not always be diversified among countries or regions and the effect on the share price of the Portfolios of specific risks such as political, regulatory and currency may be magnified due to concentration of the Portfolios’ investments in a particular country or region.
Emerging-Markets Securities Risk: The risks of investing in foreign (non-US) securities are heightened with respect to issuers in emerging-market countries because the markets are less developed and less liquid and there may be a greater amount of economic, political and social uncertainty, and these risks are even more pronounced in “frontier” markets, which are investable markets with lower total market capitalization and liquidity than the more developed emerging markets. Emerging markets typically have fewer medical and economic resources than more developed countries, and thus they may be less able to control or mitigate the effects of a pandemic, climate change, or a natural disaster. In addition, the value of the Portfolios’ investments may decline because of factors such as unfavorable or unsuccessful government actions and reduction of government or central bank support.
Foreign Currency Risk: This is the risk that changes in foreign (non-US) currency exchange rates may negatively affect the value of the Portfolios’ investments or reduce the returns of the Portfolios. For example, the value of the Portfolios’ investments in foreign securities and foreign currency positions may decrease if the US dollar is strong (i.e., gaining value relative to other currencies) and other currencies are weak (i.e., losing value relative to the US dollar). The value of the US dollar has recently appreciated in value against most foreign currencies, which may negatively affect the value of the Portfolios’ foreign investments when converted to US dollars.
Actions by a Few Major Investors: In certain countries, volatility may be heightened by actions of a few major investors. For example, substantial increases or decreases in cash flows of mutual funds investing in these markets could significantly affect local stock prices and, therefore, share prices of the Portfolios.
These risks are discussed in further detail in the Portfolios’ prospectus.
An Important Note About Historical Performance
The performance shown in this report represents past performance and does not guarantee future results. Performance information is as of the dates shown. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by calling 212.756.4097. The investment return and principal value of an investment in the Portfolios will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost.
Investors should consider the investment objectives, risks, charges and expenses of the Portfolios carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit www.Bernstein.com, click on “Investments”, found in the footer, then “Mutual Fund Information—Prospectuses, SAIs and Shareholder Reports”, or call Bernstein’s mutual fund shareholder help line at 212.756.4097 or contact your Bernstein Advisor. Please read the prospectus and/or summary prospectus carefully before investing.
Historical Performance (Unaudited)
Bernstein Fund Portfolios vs. Their Benchmarks and Lipper Averages
| | | | | | | | | | | | | | | | | | | | |
| | | TOTAL RETURNS | | | AVERAGE ANNUAL TOTAL RETURNS | | | | |
| THROUGH SEPTEMBER 30, 2023 | | PAST SIX
MONTHS | | | PAST 12
MONTHS | | | PAST FIVE
YEARS | | | SINCE
INCEPTION | | | INCEPTION DATE | |
Small Cap Core Portfolio | | | | | | | | | | | | | | | | | | | | |
SCB Class Shares1 | | | | | | | | | | | | | | | | | | | 12/29/2015 | |
NAV Returns | | | 1.78 | % | | | 14.07 | % | | | 2.82 | % | | | 6.08 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | 1.78 | % | | | 14.07 | % | | | 2.82 | % | | | 6.08 | % | | | | |
Advisor Class Shares1 | | | | | | | | | | | | | | | | | | | 12/29/2015 | |
NAV Returns | | | 1.86 | % | | | 14.41 | % | | | 3.08 | % | | | 6.34 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | 1.86 | % | | | 14.41 | % | | | 3.08 | % | | | 6.34 | % | | | | |
Class Z Shares1 | | | | | | | | | | | | | | | | | | | 12/29/2015 | |
NAV Returns | | | 1.86 | % | | | 14.34 | % | | | 3.11 | % | | | 6.35 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | 1.86 | % | | | 14.34 | % | | | 3.11 | % | | | 6.35 | % | | | | |
Russell 2000 Index | | | -0.19 | % | | | 8.93 | % | | | 2.40 | % | | | 7.15 | % | | | | |
Lipper Small-Cap Core Funds Average | | | 0.00 | % | | | 12.77 | % | | | 3.78 | % | | | 7.37 | % | | | | |
| | | The current prospectus table shows the total annual operating expense ratios for the Portfolio as 1.13%, 0.88% and 0.87% for SCB Class, Advisor Class and Class Z shares, respectively. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods. |
| 1 | | These share classes are offered at NAV to eligible investors and their SEC returns are the same as their NAV returns. Please note that these share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Portfolio. |
See Disclosures, Risks and Note About Historical Performance on pages 6–9.
(Historical Performance continued on next page)
Historical Performance (continued from previous page)
Bernstein Fund Portfolios vs. Their Benchmarks and Lipper Averages
| | | | | | | | | | | | | | | | | | | | |
| | | TOTAL RETURNS | | | AVERAGE ANNUAL TOTAL RETURNS | | | | |
| THROUGH SEPTEMBER 30, 2023 | | PAST SIX
MONTHS | | | PAST 12
MONTHS | | | PAST FIVE
YEARS | | | SINCE
INCEPTION | | | INCEPTION DATE | |
International Small Cap Portfolio | | | | | | | | | | | | | | | | | | | | |
SCB Class Shares1,2 | | | | | | | | | | | | | | | | | | | 12/21/2015 | |
NAV Returns | | | -1.57 | % | | | 20.30 | % | | | 0.16 | % | | | 3.74 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | -1.57 | % | | | 20.30 | % | | | 0.16 | % | | | 3.74 | % | | | | |
Advisor Class Shares1 | | | | | | | | | | | | | | | | | | | 12/21/2015 | |
NAV Returns | | | -1.48 | % | | | 20.54 | % | | | 0.42 | % | | | 3.98 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | -1.48 | % | | | 20.54 | % | | | 0.42 | % | | | 3.98 | % | | | | |
Class Z Shares1 | | | | | | | | | | | | | | | | | | | 12/21/2015 | |
NAV Returns | | | -1.57 | % | | | 20.42 | % | | | 0.41 | % | | | 3.97 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | -1.57 | % | | | 20.42 | % | | | 0.41 | % | | | 3.97 | % | | | | |
MSCI ACWI ex USA Small Cap (net) | | | 0.32 | % | | | 19.01 | % | | | 2.58 | % | | | 5.49 | % | | | | |
Lipper International Small/Mid-Cap Core Funds Average | | | -1.25 | % | | | 24.53 | % | | | 1.53 | % | | | 4.74 | % | | | | |
| | | The current prospectus table shows the total annual operating expense ratios for the Portfolio as 1.32%, 1.07% and 1.07% for SCB Class, Advisor Class and Class Z shares, respectively. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods. |
| 1 | | These share classes are offered at NAV to eligible investors and their SEC returns are the same as their NAV returns. Please note that these share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Portfolio. |
| 2 | | The returns shown are based on net asset values calculated for shareholder transactions and may differ from the returns shown in the Financial Highlights, which reflect adjustments made to the net asset values in accordance with accounting principles generally accepted in the United States of America. |
See Disclosures, Risks and Note About Historical Performance on pages 6–9.
(Historical Performance continued on next page)
Historical Performance (continued from previous page)
Bernstein Fund Portfolios vs. Their Benchmarks and Lipper Averages
| | | | | | | | | | | | | | | | | | | | |
| | | TOTAL RETURNS | | | AVERAGE ANNUAL TOTAL RETURNS | | | | |
| THROUGH SEPTEMBER 30, 2023 | | PAST SIX
MONTHS | | | PAST 12
MONTHS | | | PAST FIVE
YEARS | | | SINCE
INCEPTION | | | INCEPTION DATE | |
International Strategic Equities Portfolio | | | | | | | | | | | | | | | | | | | | |
SCB Class Shares1 | | | | | | | | | | | | | | | | | | | 12/21/2015 | |
NAV Returns | | | -2.32 | % | | | 18.82 | % | | | 0.50 | % | | | 3.77 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | -2.32 | % | | | 18.82 | % | | | 0.50 | % | | | 3.77 | % | | | | |
Advisor Class Shares1 | | | | | | | | | | | | | | | | | | | 12/21/2015 | |
NAV Returns | | | -2.14 | % | | | 19.19 | % | | | 0.74 | % | | | 4.02 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | -2.14 | % | | | 19.19 | % | | | 0.74 | % | | | 4.02 | % | | | | |
Class Z Shares1 | | | | | | | | | | | | | | | | | | | 12/21/2015 | |
NAV Returns | | | -2.13 | % | | | 19.25 | % | | | 0.74 | % | | | 4.03 | % | | | | |
SEC Returns (reflects applicable sales charges) | | | -2.13 | % | | | 19.25 | % | | | 0.74 | % | | | 4.03 | % | | | | |
MSCI ACWI ex USA (net) | | | -1.43 | % | | | 20.39 | % | | | 2.58 | % | | | 5.23 | % | | | | |
Lipper International Multi-Cap Core Funds Average | | | -1.21 | % | | | 23.62 | % | | | 2.43 | % | | | 4.66 | % | | | | |
| | | The current prospectus table shows the total annual operating expense ratios for the Portfolio as 0.94%, 0.70% and 0.71% for SCB Class, Advisor Class and Class Z shares, respectively, gross of any fee waivers or expense reimbursements. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods. |
| 1 | | These share classes are offered at NAV to eligible investors and their SEC returns are the same as their NAV returns. Please note that these share classes are for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Portfolio. |
See Disclosures, Risks and Note About Historical Performance on pages 6–9.
(Historical Performance continued on next page)
Historical Performance (continued from previous page)
| | | | | | |
| Small Cap Core—SCB Class Shares | | | | | |
Growth of a $10,000 Investment in the Portfolio | | | | | | |
 | | | | | | |
| | | | | | |
| International Small Cap—SCB Class Shares | | | | | |
Growth of a $10,000 Investment in the Portfolio | | | | | | |
| | | | | | |
| | | | | | |
| International Strategic Equities—SCB Class Shares | | | | | |
Growth of a $10,000 Investment in the Portfolio | | | | | | |
 | | | | | | |
| | | Past performance is no guarantee of future results and an investment in the Portfolios could lose value. Each chart illustrates the total value of an assumed $10,000 investment as compared with the performance of each Portfolio’s respective benchmark and Lipper Average for the period since inception through September 30, 2023. |
| 1 | | Inception date: 12/29/2015. |
| 2 | | Inception date: 12/21/2015. |
See Disclosures, Risks and Note About Historical Performance on pages 6–9.
Expense Example—September 30, 2023 (Unaudited)
As a shareholder of a Portfolio, you incur various ongoing costs, including management fees and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.
Actual Expenses—The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes—The second line of the table below provides information about hypothetical account values and hypothetical expenses based on a Portfolio’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | | | | | | | | | | | | | | | |
| | | BEGINNING
ACCOUNT VALUE
APRIL 1, 2023 | | | ENDING
ACCOUNT VALUE
SEPTEMBER 30, 2023 | | | EXPENSES
PAID DURING
PERIOD* | | | ANNUALIZED
EXPENSE
RATIO* | |
Small Cap Core Portfolio | | | | | | | | | | | | |
SCB Class | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 1,017.80 | | | $ | 5.77 | | | | 1.14 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,019.35 | | | $ | 5.77 | | | | 1.14 | % |
Advisor Class | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 1,018.60 | | | $ | 4.50 | | | | 0.89 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,020.61 | | | $ | 4.51 | | | | 0.89 | % |
Class Z | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 1,018.60 | | | $ | 4.45 | | | | 0.88 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,020.66 | | | $ | 4.46 | | | | 0.88 | % |
| |
International Small Cap Portfolio | | | | | | | | | | | | |
SCB Class | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 984.30 | | | $ | 6.72 | | | | 1.35 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,018.30 | | | $ | 6.83 | | | | 1.35 | % |
Advisor Class | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 985.20 | | | $ | 5.47 | | | | 1.10 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,019.55 | | | $ | 5.57 | | | | 1.10 | % |
Class Z | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 984.30 | | | $ | 5.42 | | | | 1.09 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,019.60 | | | $ | 5.52 | | | | 1.09 | % |
| |
International Strategic Equities Portfolio | | | | | | | | | | | | |
SCB Class | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 976.80 | | | $ | 4.76 | | | | 0.96 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,020.26 | | | $ | 4.86 | | | | 0.96 | % |
Advisor Class | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 978.60 | | | $ | 3.52 | | | | 0.71 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,021.51 | | | $ | 3.60 | | | | 0.71 | % |
Class Z | | | | | | | | | | | | |
Actual | | $ | 1,000 | | | $ | 978.70 | | | $ | 3.62 | | | | 0.73 | % |
Hypothetical** | | $ | 1,000 | | | $ | 1,021.41 | | | $ | 3.70 | | | | 0.73 | % |
| |
| * | | Expenses are equal to the classes’ annualized expense ratios, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). |
| ** | | Assumes 5% annual return before expenses. |
Portfolio Summary—September 30, 2023 (Unaudited)
| | | | | | |
| Small Cap Core Portfolio | | | |
| |
| Sector Breakdown1 | | | |
Industrials | | | 18.9 | % | | |
Financials | | | 17.4 | | | |
Health Care | | | 14.6 | | | |
Information Technology | | | 12.6 | | | |
Consumer Discretionary | | | 11.1 | | | |
Energy | | | 9.3 | | | |
Real Estate | | | 6.6 | | | |
Materials | | | 3.2 | | | |
Consumer Staples | | | 2.7 | | | |
Communication Services | | | 2.3 | | | |
Utilities | | | 1.3 | | | |
| | | | | | |
| International Small Cap Portfolio |
| |
| Sector Breakdown1 | | | Country Breakdown1 |
| Industrials | | | 22.9 | % | |  |
Consumer Discretionary | | | 13.4 | |
Financials | | | 12.8 | |
Information Technology | | | 11.2 | |
Materials | | | 8.7 | |
Communication Services | | | 8.4 | |
Health Care | | | 8.0 | |
Energy | | | 4.9 | |
Real Estate | | | 3.5 | |
Consumer Staples | | | 3.4 | |
Utilities | | | 2.8 | |
| | | | | | |
| International Strategic Equities Portfolio |
| |
| Sector Breakdown1 | | | Country Breakdown1 |
Financials | | | 20.2 | % | |  |
Industrials | | | 16.8 | |
Consumer Discretionary | | | 14.0 | |
Information Technology | | | 12.8 | |
Health Care | | | 10.3 | |
Consumer Staples | | | 7.3 | |
Energy | | | 6.7 | |
Materials | | | 4.4 | |
Communication Services | | | 3.2 | |
Utilities | | | 2.7 | |
Real Estate | | | 1.6 | | | |
| 1 | | The Portfolio’s country and sector breakdowns are expressed as a percentage of each Portfolio’s long-term investments and may vary over time. Each Portfolio may also invest in other financial instruments, including derivative instruments, which provide investment exposure to a variety of asset classes (see “Schedule of Investments” section of the report for additional details). |
| 2 | | “Other” represents 8.5% in MSCI EM Index countries, 10.5% in MSCI EAFE Index countries and 1.1% in other emerging-market countries. |
| 3 | | “Other” represents 2.1% in MSCI EM Index countries, 5.4% in MSCI EAFE Index countries and 3.7% in other emerging-market countries. |
| | | Please note: The sector classifications presented herein are based on the Global Industry Classification Standard (GICS) which was developed by Morgan Stanley Capital International and Standard & Poor’s. The components are divided into sector, industry group, and industry sub-indices as classified by the GICS for each of the market capitalization indices in the broad market. These sector classifications are broadly defined. The “Schedule of Investments” section of the report reflects more specific industry information and is consistent with the investment restrictions discussed in the Portfolio’s prospectus. |
Schedule of Investments
Bernstein Fund, Inc.
Schedule of Investments
Small Cap Core Portfolio
September 30, 2023
| | | | | | | | |
| | |
| Company | | Shares | | | U.S. $ Value | |
|
| COMMON STOCKS–97.1% | |
|
| Industrials–18.4% | |
| Aerospace & Defense–0.5% | |
Curtiss-Wright Corp. | | | 14,810 | | | $ | 2,897,280 | |
| | | | | | | | |
| Air Freight & Logistics–0.7% | |
Forward Air Corp. | | | 40,930 | | | | 2,813,528 | |
Radiant Logistics, Inc.(a) | | | 326,103 | | | | 1,842,482 | |
| | | | | | | | |
| | | | | | | 4,656,010 | |
| | | | | | | | |
| Building Products–1.7% | |
American Woodmark Corp.(a) | | | 27,423 | | | | 2,073,453 | |
Gibraltar Industries, Inc.(a) | | | 25,030 | | | | 1,689,775 | |
Masonite International Corp.(a) | | | 24,010 | | | | 2,238,212 | |
UFP Industries, Inc. | | | 51,157 | | | | 5,238,477 | |
| | | | | | | | |
| | | | | | | 11,239,917 | |
| | | | | | | | |
| Commercial Services & Supplies–0.5% | |
Quad/Graphics, Inc.(a) | | | 23,900 | | | | 120,217 | |
Tetra Tech, Inc. | | | 21,022 | | | | 3,195,975 | |
| | | | | | | | |
| | | | | | | 3,316,192 | |
| | | | | | | | |
| Construction & Engineering–2.0% | |
Comfort Systems USA, Inc. | | | 28,099 | | | | 4,788,350 | |
EMCOR Group, Inc. | | | 9,120 | | | | 1,918,757 | |
Fluor Corp.(a) | | | 83,410 | | | | 3,061,147 | |
IES Holdings, Inc.(a) | | | 6,077 | | | | 400,292 | |
MasTec, Inc.(a) | | | 35,134 | | | | 2,528,594 | |
| | | | | | | | |
| | | | | | | 12,697,140 | |
| | | | | | | | |
| Electrical Equipment–0.6% | |
Powell Industries, Inc. | | | 20,786 | | | | 1,723,159 | |
Regal Rexnord Corp. | | | 16,780 | | | | 2,397,527 | |
| | | | | | | | |
| | | | | | | 4,120,686 | |
| | | | | | | | |
| Ground Transportation–0.5% | |
ArcBest Corp. | | | 31,403 | | | | 3,192,115 | |
| | | | | | | | |
| Machinery–2.5% | |
Blue Bird Corp.(a) | | | 69,550 | | | | 1,484,892 | |
Commercial Vehicle Group, Inc.(a) | | | 139,210 | | | | 1,080,270 | |
Oshkosh Corp. | | | 36,060 | | | | 3,441,206 | |
Shyft Group, Inc. (The) | | | 149,040 | | | | 2,231,129 | |
Terex Corp. | | | 79,180 | | | | 4,562,352 | |
Wabash National Corp. | | | 147,521 | | | | 3,115,643 | |
| | | | | | | | |
| | | | | | | 15,915,492 | |
| | | | | | | | |
| Marine Transportation–1.0% | |
Matson, Inc. | | | 47,430 | | | | 4,207,989 | |
Star Bulk Carriers Corp. | | | 112,060 | | | | 2,160,517 | |
| | | | | | | | |
| | | | | | | 6,368,506 | |
| | | | | | | | |
| Professional Services–4.4% | |
CACI International, Inc.–Class A(a) | | | 6,106 | | | | 1,916,857 | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Concentrix Corp. | | | 15,093 | | | $ | 1,209,100 | |
IBEX Holdings Ltd.(a) | | | 14,450 | | | | 223,252 | |
ICF International, Inc. | | | 23,420 | | | | 2,829,370 | |
Insperity, Inc. | | | 38,821 | | | | 3,788,930 | |
KBR, Inc. | | | 26,204 | | | | 1,544,464 | |
Korn Ferry | | | 69,960 | | | | 3,318,902 | |
Legalzoom.com, Inc.(a) | | | 120,950 | | | | 1,323,193 | |
Maximus, Inc. | | | 57,771 | | | | 4,314,338 | |
Science Applications International Corp. | | | 23,920 | | | | 2,524,517 | |
TrueBlue, Inc.(a) | | | 67,136 | | | | 984,885 | |
TTEC Holdings, Inc. | | | 47,440 | | | | 1,243,877 | |
WNS Holdings Ltd. (ADR)(a) | | | 43,512 | | | | 2,978,832 | |
| | | | | | | | |
| | | | | | | 28,200,517 | |
| | | | | | | | |
| Trading Companies & Distributors–4.0% | |
Applied Industrial Technologies, Inc. | | | 26,597 | | | | 4,112,162 | |
Beacon Roofing Supply, Inc.(a) | | | 17,400 | | | | 1,342,758 | |
BlueLinx Holdings, Inc.(a) | | | 24,180 | | | | 1,984,936 | |
Boise Cascade Co. | | | 47,382 | | | | 4,882,241 | |
GMS, Inc.(a) | | | 59,881 | | | | 3,830,588 | |
MRC Global, Inc.(a) | | | 296,630 | | | | 3,040,458 | |
Rush Enterprises, Inc.–Class A | | | 100,872 | | | | 4,118,604 | |
Veritiv Corp. | | | 15,590 | | | | 2,633,151 | |
| | | | | | | | |
| | | | | | | 25,944,898 | |
| | | | | | | | |
| | | | | | | 118,548,753 | |
| | | | | | | | |
| | | | | | | | |
| |
| Financials–16.9% | |
| Banks–8.6% | |
1st Source Corp. | | | 48,707 | | | | 2,050,078 | |
Associated Banc-Corp. | | | 183,970 | | | | 3,147,727 | |
Bank of Marin Bancorp | | | 97,050 | | | | 1,774,074 | |
BankUnited, Inc. | | | 130,279 | | | | 2,957,333 | |
Berkshire Hills Bancorp, Inc. | | | 157,530 | | | | 3,158,476 | |
Customers Bancorp, Inc.(a) | | | 57,640 | | | | 1,985,698 | |
East West Bancorp, Inc. | | | 56,360 | | | | 2,970,736 | |
First BanCorp./Puerto Rico | | | 277,840 | | | | 3,739,726 | |
First Busey Corp. | | | 176,780 | | | | 3,397,712 | |
Heritage Financial Corp./WA | | | 201,790 | | | | 3,291,195 | |
International Bancshares Corp. | | | 76,360 | | | | 3,309,442 | |
Nicolet Bankshares, Inc. | | | 45,899 | | | | 3,202,832 | |
Northeast Bank | | | 88,101 | | | | 3,885,254 | |
Peoples Bancorp, Inc./OH | | | 129,420 | | | | 3,284,680 | |
Premier Financial Corp. | | | 75,950 | | | | 1,295,707 | |
Republic Bancorp, Inc./KY–Class A | | | 50,480 | | | | 2,223,644 | |
Synovus Financial Corp. | | | 79,582 | | | | 2,212,380 | |
Texas Capital Bancshares, Inc.(a) | | | 66,610 | | | | 3,923,329 | |
TriCo Bancshares | | | 48,130 | | | | 1,541,604 | |
WSFS Financial Corp. | | | 48,070 | | | | 1,754,555 | |
| | | | | | | | |
| | | | | | | 55,106,182 | |
| | | | | | | | |
| Capital Markets–1.0% | |
Evercore, Inc.–Class A | | | 22,912 | | | | 3,159,107 | |
Houlihan Lokey, Inc. | | | 32,116 | | | | 3,440,266 | |
| | | | | | | | |
| | | | | | | 6,599,373 | |
| | | | | | | | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| Consumer Finance–1.0% | |
Nelnet, Inc.–Class A | | | 37,633 | | | $ | 3,361,379 | |
OneMain Holdings, Inc. | | | 47,374 | | | | 1,899,224 | |
PROG Holdings, Inc.(a) | | | 44,980 | | | | 1,493,786 | |
| | | | | | | | |
| | | | | | | 6,754,389 | |
| | | | | | | | |
| Financial Services–2.8% | |
Essent Group Ltd. | | | 80,957 | | | | 3,828,456 | |
EVERTEC, Inc. | | | 78,094 | | | | 2,903,535 | |
MGIC Investment Corp. | | | 192,660 | | | | 3,215,495 | |
Mr Cooper Group, Inc.(a) | | | 77,660 | | | | 4,159,470 | |
Pagseguro Digital Ltd.–Class A(a) | | | 207,890 | | | | 1,789,933 | |
PennyMac Financial Services, Inc. | | | 31,488 | | | | 2,097,101 | |
| | | | | | | | |
| | | | | | | 17,993,990 | |
| | | | | | | | |
| Insurance–2.8% | |
American Equity Investment Life Holding Co.(a) | | | 79,020 | | | | 4,238,633 | |
Assured Guaranty Ltd. | | | 50,120 | | | | 3,033,262 | |
Genworth Financial, Inc.–Class A(a) | | | 646,276 | | | | 3,787,177 | |
Hanover Insurance Group, Inc. (The) | | | 23,520 | | | | 2,610,250 | |
Kinsale Capital Group, Inc. | | | 7,840 | | | | 3,246,779 | |
Palomar Holdings, Inc.(a) | | | 28,080 | | | | 1,425,060 | |
| | | | | | | | |
| | | | | | | 18,341,161 | |
| | | | | | | | |
| Mortgage Real Estate Investment Trusts (REITs)–0.7% | |
MFA Financial, Inc. | | | 176,790 | | | | 1,698,952 | |
PennyMac Mortgage Investment Trust | | | 93,490 | | | | 1,159,276 | |
Ready Capital Corp. | | | 131,220 | | | | 1,326,634 | |
| | | | | | | | |
| | | | | | | 4,184,862 | |
| | | | | | | | |
| | | | | | | 108,979,957 | |
| | | | | | | | |
| | | | | | | | |
| |
| Health Care–14.2% | |
| Biotechnology–6.6% | |
Akero Therapeutics, Inc.(a) | | | 43,480 | | | | 2,199,218 | |
Ascendis Pharma A/S (ADR)(a) | | | 24,607 | | | | 2,304,200 | |
Blueprint Medicines Corp.(a) | | | 55,625 | | | | 2,793,488 | |
Bridgebio Pharma, Inc.(a) | | | 75,610 | | | | 1,993,836 | |
Emergent BioSolutions, Inc.(a) | | | 27,391 | | | | 93,129 | |
Gossamer Bio, Inc.(a) | | | 148,270 | | | | 123,479 | |
Halozyme Therapeutics, Inc.(a) | | | 147,512 | | | | 5,634,958 | |
Insmed, Inc.(a) | | | 132,641 | | | | 3,349,185 | |
Intellia Therapeutics, Inc.(a) | | | 83,660 | | | | 2,645,329 | |
Karuna Therapeutics, Inc.(a) | | | 11,774 | | | | 1,990,866 | |
Legend Biotech Corp. (ADR)(a) | | | 31,810 | | | | 2,136,678 | |
Madrigal Pharmaceuticals, Inc.(a) | | | 16,300 | | | | 2,380,452 | |
MoonLake Immunotherapeutics(a) | | | 37,690 | | | | 2,148,330 | |
Rayzebio, Inc.(a) | | | 69,140 | | | | 1,534,908 | |
Ultragenyx Pharmaceutical, Inc.(a) | | | 54,294 | | | | 1,935,581 | |
Vaxcyte, Inc.(a) | | | 71,920 | | | | 3,666,482 | |
Viking Therapeutics, Inc.(a) | | | 193,990 | | | | 2,147,469 | |
Vir Biotechnology, Inc.(a) | | | 170,957 | | | | 1,601,867 | |
Viridian Therapeutics, Inc.(a) | | | 98,530 | | | | 1,511,450 | |
Y-mAbs Therapeutics, Inc.(a) | | | 14,559 | | | | 79,347 | |
| | | | | | | | |
| | | | | | | 42,270,252 | |
| | | | | | | | |
| Health Care Equipment & Supplies–2.3% | |
AtriCure, Inc.(a) | | | 50,310 | | | | 2,203,578 | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
CONMED Corp. | | | 23,049 | | | $ | 2,324,491 | |
Integer Holdings Corp.(a) | | | 46,690 | | | | 3,661,897 | |
iRhythm Technologies, Inc.(a) | | | 30,645 | | | | 2,888,598 | |
Lantheus Holdings, Inc.(a) | | | 51,980 | | | | 3,611,570 | |
| | | | | | | | |
| | | | | | | 14,690,134 | |
| | | | | | | | |
| Health Care Providers & Services–2.1% | |
AMN Healthcare Services, Inc.(a) | | | 39,035 | | | | 3,325,001 | |
Option Care Health, Inc.(a) | | | 141,770 | | | | 4,586,260 | |
Owens & Minor, Inc.(a) | | | 184,459 | | | | 2,980,857 | |
Pediatrix Medical Group, Inc.(a) | | | 150,240 | | | | 1,909,550 | |
PetIQ, Inc.(a) | | | 48,597 | | | | 957,361 | |
| | | | | | | | |
| | | | | | | 13,759,029 | |
| | | | | | | | |
| Health Care Technology–0.8% | |
Computer Programs & Systems, Inc.(a) | | | 108,920 | | | | 1,736,185 | |
Health Catalyst, Inc.(a) | | | 126,724 | | | | 1,282,447 | |
NextGen Healthcare, Inc.(a) | | | 100,100 | | | | 2,375,373 | |
| | | | | | | | |
| | | | | | | 5,394,005 | |
| | | | | | | | |
| Life Sciences Tools & Services–0.3% | |
Repligen Corp.(a) | | | 9,676 | | | | 1,538,581 | |
| | | | | | | | |
| Pharmaceuticals–2.1% | |
Amphastar Pharmaceuticals, Inc.(a) | | | 81,870 | | | | 3,765,201 | |
Collegium Pharmaceutical, Inc.(a) | | | 109,827 | | | | 2,454,634 | |
Corcept Therapeutics, Inc.(a) | | | 65,264 | | | | 1,778,118 | |
Harmony Biosciences Holdings, Inc.(a) | | | 102,620 | | | | 3,362,857 | |
Intra-Cellular Therapies, Inc.(a) | | | 46,110 | | | | 2,401,870 | |
| | | | | | | | |
| | | | | | | 13,762,680 | |
| | | | | | | | |
| | | | | | | 91,414,681 | |
| | | | | | | | |
| | | | | | | | |
| |
| Information Technology–12.2% | |
| Electronic Equipment, Instruments & Components–3.6% | |
Allegro MicroSystems, Inc.(a) | | | 99,690 | | | | 3,184,099 | |
Avnet, Inc. | | | 68,700 | | | | 3,310,653 | |
Insight Enterprises, Inc.(a) | | | 31,790 | | | | 4,625,445 | |
OSI Systems, Inc.(a) | | | 30,772 | | | | 3,632,327 | |
Sanmina Corp.(a) | | | 72,876 | | | | 3,955,709 | |
TTM Technologies, Inc.(a) | | | 244,600 | | | | 3,150,448 | |
Vishay Intertechnology, Inc. | | | 53,341 | | | | 1,318,589 | |
| | | | | | | | |
| | | | | | | 23,177,270 | |
| | | | | | | | |
| IT Services–0.6% | |
DigitalOcean Holdings, Inc.(a) | | | 58,470 | | | | 1,405,034 | |
Perficient, Inc.(a) | | | 39,716 | | | | 2,297,968 | |
| | | | | | | | |
| | | | | | | 3,703,002 | |
| | | | | | | | |
| Semiconductors & Semiconductor Equipment–3.2% | |
Axcelis Technologies, Inc.(a) | | | 11,220 | | | | 1,829,421 | |
Kulicke & Soffa Industries, Inc. | | | 77,303 | | | | 3,759,245 | |
MACOM Technology Solutions Holdings, Inc.(a) | | | 58,820 | | | | 4,798,535 | |
Onto Innovation, Inc.(a) | | | 43,590 | | | | 5,558,597 | |
Photronics, Inc.(a) | | | 89,960 | | | | 1,818,092 | |
SMART Global Holdings, Inc.(a) | | | 116,080 | | | | 2,826,548 | |
| | | | | | | | |
| | | | | | | 20,590,438 | |
| | | | | | | | |
Schedule of Investments (continued)
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| Software–4.8% | |
8x8, Inc.(a) | | �� | 452,879 | | | $ | 1,141,255 | |
A10 Networks, Inc. | | | 219,360 | | | | 3,296,981 | |
ACI Worldwide, Inc.(a) | | | 127,930 | | | | 2,886,101 | |
Box, Inc.–Class A(a) | | | 126,130 | | | | 3,053,607 | |
CommVault Systems, Inc.(a) | | | 56,968 | | | | 3,851,606 | |
Consensus Cloud Solutions, Inc.(a) | | | 64,183 | | | | 1,616,128 | |
NCR Corp.(a) | | | 79,579 | | | | 2,146,246 | |
Progress Software Corp. | | | 68,871 | | | | 3,621,237 | |
Qualys, Inc.(a) | | | 29,790 | | | | 4,544,465 | |
SPS Commerce, Inc.(a) | | | 30,620 | | | | 5,224,078 | |
| | | | | | | | |
| | | | | | | 31,381,704 | |
| | | | | | | | |
| | | | | | | 78,852,414 | |
| | | | | | | | |
| | | | | | | | |
| |
| Consumer Discretionary–10.8% | |
| Automobile Components–1.6% | |
Dana, Inc. | | | 139,760 | | | | 2,050,279 | |
Fox Factory Holding Corp.(a) | | | 28,700 | | | | 2,843,596 | |
Goodyear Tire & Rubber Co. (The)(a) | | | 252,220 | | | | 3,135,095 | |
Patrick Industries, Inc. | | | 27,772 | | | | 2,084,566 | |
| | | | | | | | |
| | | | | | | 10,113,536 | |
| | | | | | | | |
| Automobiles–0.6% | |
Thor Industries, Inc. | | | 20,767 | | | | 1,975,565 | |
Winnebago Industries, Inc. | | | 27,456 | | | | 1,632,259 | |
| | | | | | | | |
| | | | | | | 3,607,824 | |
| | | | | | | | |
| Broadline Retail–0.6% | |
Dillard’s, Inc.–Class A | | | 11,250 | | | | 3,721,613 | |
| | | | | | | | |
| Diversified Consumer Services–1.6% | |
Adtalem Global Education, Inc.(a) | | | 90,490 | | | | 3,877,497 | |
Perdoceo Education Corp. | | | 224,092 | | | | 3,831,973 | |
Stride, Inc.(a) | | | 56,400 | | | | 2,539,692 | |
| | | | | | | | |
| | | | | | | 10,249,162 | |
| | | | | | | | |
| Hotels, Restaurants & Leisure–2.0% | |
Accel Entertainment, Inc.(a) | | | 43,900 | | | | 480,705 | |
Dine Brands Global, Inc. | | | 47,250 | | | | 2,336,512 | |
Hilton Grand Vacations, Inc.(a) | | | 83,100 | | | | 3,382,170 | |
Inspired Entertainment, Inc.(a) | | | 5,928 | | | | 70,899 | |
Marriott Vacations Worldwide Corp. | | | 21,636 | | | | 2,177,231 | |
Papa John’s International, Inc. | | | 40,410 | | | | 2,756,770 | |
Travel + Leisure Co. | | | 54,951 | | | | 2,018,350 | |
| | | | | | | | |
| | | | | | | 13,222,637 | |
| | | | | | | | |
| Household Durables–1.8% | |
Hovnanian Enterprises, Inc.–Class A(a) | | | 12,051 | | | | 1,225,105 | |
KB Home | | | 88,830 | | | | 4,111,052 | |
Taylor Morrison Home Corp.(a) | | | 104,411 | | | | 4,448,953 | |
Tri Pointe Homes, Inc.(a) | | | 63,960 | | | | 1,749,306 | |
| | | | | | | | |
| | | | | | | 11,534,416 | |
| | | | | | | | |
| Leisure Products–0.4% | |
MasterCraft Boat Holdings, Inc.(a) | | | 72,695 | | | | 1,615,283 | |
Solo Brands, Inc.–Class A(a) | | | 154,093 | | | | 785,874 | |
| | | | | | | | |
| | | | | | | 2,401,157 | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| Specialty Retail–0.8% | |
Citi Trends, Inc.(a) | | | 102,410 | | | $ | 2,275,550 | |
Murphy USA, Inc. | | | 5,743 | | | | 1,962,556 | |
Upbound Group, Inc. | | | 43,720 | | | | 1,287,554 | |
| | | | | | | | |
| | | | | | | 5,525,660 | |
| | | | | | | | |
| Textiles, Apparel & Luxury Goods–1.4% | |
Carter’s, Inc. | | | 28,490 | | | | 1,970,083 | |
Crocs, Inc.(a) | | | 34,542 | | | | 3,047,641 | |
G-III Apparel Group Ltd.(a) | | | 54,100 | | | | 1,348,172 | |
Oxford Industries, Inc. | | | 30,625 | | | | 2,943,981 | |
| | | | | | | | |
| | | | | | | 9,309,877 | |
| | | | | | | | |
| | | | | | | 69,685,882 | |
| | | | | | | | |
| | | | | | | | |
| |
| Energy–9.0% | |
| Energy Equipment & Services–2.1% | |
Cactus, Inc.–Class A | | | 45,460 | | | | 2,282,547 | |
ChampionX Corp. | | | 140,180 | | | | 4,993,212 | |
Patterson-UTI Energy, Inc. | | | 187,650 | | | | 2,597,076 | |
Ranger Energy Services, Inc. | | | 41,880 | | | | 593,858 | |
TechnipFMC PLC | | | 158,100 | | | | 3,215,754 | |
| | | | | | | | |
| | | | | | | 13,682,447 | |
| | | | | | | | |
| Oil, Gas & Consumable Fuels–6.9% | |
Arch Resources, Inc. | | | 24,980 | | | | 4,263,087 | |
Ardmore Shipping Corp. | | | 65,677 | | | | 854,458 | |
Chord Energy Corp. | | | 29,490 | | | | 4,779,444 | |
Gulfport Energy Corp.(a) | | | 22,330 | | | | 2,649,678 | |
HF Sinclair Corp. | | | 55,232 | | | | 3,144,358 | |
International Seaways, Inc. | | | 50,290 | | | | 2,263,050 | |
Magnolia Oil & Gas Corp.–Class A | | | 197,070 | | | | 4,514,874 | |
Matador Resources Co. | | | 57,350 | | | | 3,411,178 | |
Northern Oil and Gas, Inc. | | | 103,610 | | | | 4,168,230 | |
Par Pacific Holdings, Inc.(a) | | | 36,910 | | | | 1,326,545 | |
PBF Energy, Inc.–Class A | | | 92,430 | | | | 4,947,778 | |
Peabody Energy Corp. | | | 169,750 | | | | 4,411,802 | |
Teekay Tankers Ltd.–Class A | | | 87,475 | | | | 3,641,584 | |
| | | | | | | | |
| | | | | | | 44,376,066 | |
| | | | | | | | |
| | | | | | | 58,058,513 | |
| | | | | | | | |
| | | | | | | | |
| |
| Real Estate–6.4% | |
| Diversified REITs–0.8% | |
Armada Hoffler Properties, Inc. | | | 168,100 | | | | 1,721,344 | |
Broadstone Net Lease, Inc.–Class A | | | 83,010 | | | | 1,187,043 | |
Empire State Realty Trust, Inc.–Class A | | | 296,470 | | | | 2,383,619 | |
| | | | | | | | |
| | | | | | | 5,292,006 | |
| | | | | | | | |
| Health Care REITs–0.8% | |
Diversified Healthcare Trust | | | 733,740 | | | | 1,423,456 | |
Physicians Realty Trust | | | 104,332 | | | | 1,271,807 | |
Sabra Health Care REIT, Inc. | | | 175,560 | | | | 2,447,306 | |
| | | | | | | | |
| | | | | | | 5,142,569 | |
| | | | | | | | |
| Hotel & Resort REITs–1.0% | |
RLJ Lodging Trust | | | 281,929 | | | | 2,760,085 | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Service Properties Trust | | | 460,120 | | | $ | 3,538,323 | |
| | | | | | | | |
| | | | | | | 6,298,408 | |
| | | | | | | | |
| Industrial REITs–1.0% | |
First Industrial Realty Trust, Inc. | | | 47,016 | | | | 2,237,491 | |
Plymouth Industrial REIT, Inc. | | | 61,040 | | | | 1,278,788 | |
STAG Industrial, Inc. | | | 87,194 | | | | 3,009,065 | |
| | | | | | | | |
| | | | | | | 6,525,344 | |
| | | | | | | | |
| Real Estate Management & Development–0.5% | |
Forestar Group, Inc.(a) | | | 119,650 | | | | 3,223,371 | |
| | | | | | | | |
| Residential REITs–0.4% | |
Apartment Income REIT Corp. | | | 39,970 | | | | 1,227,079 | |
Veris Residential, Inc. | | | 92,700 | | | | 1,529,550 | |
| | | | | | | | |
| | | | | | | 2,756,629 | |
| | | | | | | | |
| Retail REITs–1.7% | |
Kite Realty Group Trust | | | 210,480 | | | | 4,508,481 | |
Macerich Co. (The) | | | 334,560 | | | | 3,650,050 | |
NETSTREIT Corp. | | | 77,530 | | | | 1,207,917 | |
Tanger Factory Outlet Centers, Inc. | | | 57,200 | | | | 1,292,720 | |
| | | | | | | | |
| | | | | | | 10,659,168 | |
| | | | | | | | |
| Specialized REITs–0.2% | |
National Storage Affiliates Trust | | | 37,520 | | | | 1,190,885 | |
| | | | | | | | |
| | | | | | | 41,088,380 | |
| | | | | | | | |
| | | | | | | | |
| |
| Materials–3.1% | |
| Chemicals–0.8% | |
AdvanSix, Inc. | | | 44,470 | | | | 1,382,128 | |
Huntsman Corp. | | | 103,765 | | | | 2,531,866 | |
Orion SA | | | 71,890 | | | | 1,529,819 | |
| | | | | | | | |
| | | | | | | 5,443,813 | |
| | | | | | | | |
| Metals & Mining–1.5% | |
Alpha Metallurgical Resources, Inc. | | | 17,210 | | | | 4,469,953 | |
B2Gold Corp. | | | 408,810 | | | | 1,181,461 | |
Olympic Steel, Inc. | | | 41,450 | | | | 2,329,905 | |
Schnitzer Steel Industries, Inc.–Class A | | | 53,099 | | | | 1,478,807 | |
| | | | | | | | |
| | | | | | | 9,460,126 | |
| | | | | | | | |
| Paper & Forest Products–0.8% | |
Louisiana-Pacific Corp. | | | 45,405 | | | | 2,509,534 | |
Sylvamo Corp. | | | 53,680 | | | | 2,358,699 | |
| | | | | | | | |
| | | | | | | 4,868,233 | |
| | | | | | | | |
| | | | | | | 19,772,172 | |
| | | | | | | | |
| | | | | | | | |
| |
| Consumer Staples–2.6% | |
| Consumer Staples Distribution & Retail–0.7% | |
Grocery Outlet Holding Corp.(a) | | | 76,470 | | | | 2,206,160 | |
Village Super Market, Inc.–Class A | | | 98,608 | | | | 2,232,485 | |
| | | | | | | | |
| | | | | | | 4,438,645 | |
| | | | | | | | |
| Food Products–1.4% | |
Cal-Maine Foods, Inc. | | | 42,930 | | | | 2,078,671 | |
Hain Celestial Group, Inc. (The)(a) | | | 126,225 | | | | 1,308,953 | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
John B Sanfilippo & Son, Inc. | | | 30,365 | | | $ | 3,000,062 | |
Nomad Foods Ltd.(a) | | | 163,420 | | | | 2,487,252 | |
| | | | | | | | |
| | | | | | | 8,874,938 | |
| | | | | | | | |
| Personal Care Products–0.5% | |
Medifast, Inc. | | | 22,660 | | | | 1,696,101 | |
USANA Health Sciences, Inc.(a) | | | 26,470 | | | | 1,551,407 | |
| | | | | | | | |
| | | | | | | 3,247,508 | |
| | | | | | | | |
| | | | | | | 16,561,091 | |
| | | | | | | | |
| | | | | | | | |
| |
| Communication Services–2.2% | |
| Entertainment–0.3% | |
IMAX Corp.(a) | | | 114,290 | | | | 2,208,083 | |
| | | | | | | | |
| Interactive Media & Services–1.0% | |
Cargurus, Inc.(a) | | | 212,540 | | | | 3,723,700 | |
Ziff Davis, Inc.(a) | | | 41,839 | | | | 2,664,726 | |
| | | | | | | | |
| | | | | | | 6,388,426 | |
| | | | | | | | |
| Media–0.9% | |
Nexstar Media Group, Inc. | | | 23,868 | | | | 3,421,955 | |
Sinclair, Inc. | | | 165,870 | | | | 1,861,061 | |
Thryv Holdings, Inc.(a) | | | 36,585 | | | | 686,701 | |
| | | | | | | | |
| | | | | | | 5,969,717 | |
| | | | | | | | |
| | | | | | | 14,566,226 | |
| | | | | | | | |
| | | | | | | | |
| |
| Utilities–1.3% | |
| Electric Utilities–1.0% | |
Genie Energy Ltd.–Class B | | | 47,830 | | | | 704,536 | |
IDACORP, Inc. | | | 27,220 | | | | 2,549,153 | |
Portland General Electric Co. | | | 73,170 | | | | 2,961,921 | |
| | | | | | | | |
| | | | | | | 6,215,610 | |
| | | | | | | | |
| Gas Utilities–0.3% | |
Chesapeake Utilities Corp. | | | 20,880 | | | | 2,041,020 | |
| | | | | | | | |
| | | | | | | 8,256,630 | |
| | | | | | | | |
Total Investments—97.1%
(cost $544,266,095) | | | | 625,784,699 | |
| | |
Other assets less liabilities—2.9% | | | | | | | 18,727,847 | |
| | | | | | | | |
| Net Assets—100.0% | | | | | | $ | 644,512,546 | |
| | | | | | | | |
Schedule of Investments (continued)
| | | | | | | | | | | | | | |
| |
| FUTURES (see Note 3) | |
| Description | | Number of
Contracts | | | Expiration
Month | | Current
Notional | | | Value and
Unrealized
Appreciation
(Depreciation) | |
| Purchased Contracts | |
| | | | |
E-Mini Russell 2000 Index Futures | | | 359 | | | December 2023 | | $ | 32,284,870 | | | $ | (740,208) | |
| (a) | | Non-income producing security. |
Glossary:
ADR—American Depositary Receipt
REIT—Real Estate Investment Trust
See notes to financial statements.
Schedule of Investments
Bernstein Fund, Inc.
Schedule of Investments
International Small Cap Portfolio
September 30, 2023
| | | | | | | | |
| | |
| Company | | Shares | | | U.S. $ Value | |
|
| COMMON STOCKS–98.0% | |
|
| Industrials–22.5% | |
| Aerospace & Defense–1.8% | |
Bombardier, Inc.–Class B(a) | | | 59,090 | | | $ | 2,060,373 | |
QinetiQ Group PLC | | | 535,435 | | | | 2,073,702 | |
Saab AB–Class B | | | 290,751 | | | | 14,797,927 | |
| | | | | | | | |
| | | | | | | 18,932,002 | |
| | | | | | | | |
| Air Freight & Logistics–1.1% | |
Cia de Distribucion Integral Logista Holdings SA | | | 94,706 | | | | 2,420,195 | |
Hamakyorex Co., Ltd. | | | 90,100 | | | | 2,445,870 | |
Mitsui-Soko Holdings Co., Ltd. | | | 76,500 | | | | 2,201,752 | |
Senko Group Holdings Co., Ltd. | | | 302,600 | | | | 2,121,006 | |
Trancom Co., Ltd. | | | 41,400 | | | | 2,031,654 | |
| | | | | | | | |
| | | | | | | 11,220,477 | |
| | | | | | | | |
| Building Products–1.4% | |
Bunka Shutter Co., Ltd. | | | 284,300 | | | | 2,101,611 | |
Fletcher Building Ltd. | | | 1,397,237 | | | | 3,927,726 | |
Inwido AB | | | 234,501 | | | | 2,357,099 | |
Lindab International AB | | | 180,560 | | | | 2,636,053 | |
Volution Group PLC | | | 329,899 | | | | 1,456,280 | |
Zehnder Group AG | | | 28,409 | | | | 1,665,349 | |
| | | | | | | | |
| | | | | | | 14,144,118 | |
| | | | | | | | |
| Commercial Services & Supplies–0.7% | |
Downer EDI Ltd. | | | 1,952,912 | | | | 5,147,333 | |
Mitie Group PLC | | | 2,051,621 | | | | 2,559,689 | |
| | | | | | | | |
| | | | | | | 7,707,022 | |
| | | | | | | | |
| Construction & Engineering–2.2% | |
Balfour Beatty PLC | | | 2,095,811 | | | | 8,208,287 | |
Budimex SA | | | 27,878 | | | | 2,765,940 | |
Hazama Ando Corp. | | | 1,299,400 | | | | 10,134,825 | |
Veidekke ASA | | | 209,738 | | | | 1,913,724 | |
| | | | | | | | |
| | | | | | | 23,022,776 | |
| | | | | | | | |
| Electrical Equipment–1.2% | |
Nexans SA | | | 89,408 | | | | 7,248,840 | |
TKH Group NV | | | 142,274 | | | | 5,622,367 | |
| | | | | | | | |
| | | | | | | 12,871,207 | |
| | | | | | | | |
| Ground Transportation–0.8% | |
Maruzen Showa Unyu Co., Ltd. | | | 83,100 | | | | 2,102,725 | |
Nikkon Holdings Co., Ltd. | | | 122,700 | | | | 2,592,847 | |
NTG Nordic Transport Group A/S(a) | | | 36,569 | | | | 1,875,820 | |
Sakai Moving Service Co., Ltd. | | | 133,200 | | | | 2,221,606 | |
| | | | | | | | |
| | | | | | | 8,792,998 | |
| | | | | | | | |
| Industrial Conglomerates–1.0% | |
Bidvest Group Ltd. (The) | | | 689,577 | | | | 9,934,789 | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| Machinery–7.3% | |
Amada Co., Ltd. | | | 876,700 | | | $ | 8,813,710 | |
ANDRITZ AG | | | 45,758 | | | | 2,305,866 | |
ATS Corp.(a) | | | 235,845 | | | | 10,053,691 | |
Ebara Corp. | | | 61,400 | | | | 2,872,719 | |
Fuji Corp./Aichi | | | 489,400 | | | | 7,592,357 | |
Glory Ltd. | | | 417,800 | | | | 8,329,460 | |
Hyundai Construction Equipment Co., Ltd. | | | 122,129 | | | | 6,609,863 | |
IMI PLC | | | 134,481 | | | | 2,559,096 | |
Iveco Group NV(a) | | | 269,080 | | | | 2,506,588 | |
Kawasaki Heavy Industries Ltd. | | | 390,500 | | | | 9,448,096 | |
Nabtesco Corp. | | | 338,100 | | | | 6,084,209 | |
Randon SA Implementos e Participacoes (Preference Shares) | | | 955,300 | | | | 2,215,993 | |
Turk Traktor ve Ziraat Makineleri AS | | | 131,535 | | | | 4,226,429 | |
Vesuvius PLC | | | 441,880 | | | | 2,334,283 | |
| | | | | | | | |
| | | | | | | 75,952,360 | |
| | | | | | | | |
| Marine Transportation–0.2% | |
Hoegh Autoliners ASA | | | 342,862 | | | | 2,459,921 | |
| | | | | | | | |
| Passenger Airlines–0.7% | |
JET2 PLC | | | 159,814 | | | | 2,101,398 | |
Wizz Air Holdings PLC(a)(b) | | | 217,434 | | | | 5,075,290 | |
| | | | | | | | |
| | | | | | | 7,176,688 | |
| | | | | | | | |
| Professional Services–1.5% | |
Bell System24 Holdings, Inc. | | | 223,400 | | | | 2,360,538 | |
Danel Adir Yeoshua Ltd. | | | 21,384 | | | | 1,752,413 | |
dip Corp. | | | 259,800 | | | | 6,395,680 | |
McMillan Shakespeare Ltd. | | | 223,742 | | | | 2,312,008 | |
NICE Information Service Co., Ltd. | | | 96,952 | | | | 709,899 | |
Transcosmos, Inc. | | | 99,800 | | | | 2,131,244 | |
| | | | | | | | |
| | | | | | | 15,661,782 | |
| | | | | | | | |
| Trading Companies & Distributors–0.7% | |
Howden Joinery Group PLC | | | 337,049 | | | | 3,015,758 | |
Russel Metals, Inc. | | | 95,816 | | | | 2,682,072 | |
Yuasa Trading Co., Ltd. | | | 71,400 | | | | 1,972,797 | |
| | | | | | | | |
| | | | | | | 7,670,627 | |
| | | | | | | | |
| Transportation Infrastructure–1.9% | |
Anhui Expressway Co., Ltd.–Class H | | | 2,344,000 | | | | 2,447,680 | |
Grupo Aeroportuario del Centro Norte SAB de CV | | | 1,118,882 | | | | 12,163,087 | |
Gujarat Pipavav Port Ltd. | | | 1,729,028 | | | | 2,580,382 | |
Sumitomo Warehouse Co., Ltd. (The) | | | 151,600 | | | | 2,417,220 | |
| | | | | | | | |
| | | | | | | 19,608,369 | |
| | | | | | | | |
| | | | | | | 235,155,136 | |
| | | | | | | | |
| | | | | | | | |
| |
| Consumer Discretionary–13.1% | |
| Automobile Components–3.2% | |
Dowlais Group PLC | | | 4,467,577 | | | | 5,854,256 | |
Forvia SE (Paris)(a) | | | 422,944 | | | | 8,701,425 | |
Mahle Metal Leve SA | | | 289,600 | | | | 2,779,879 | |
Niterra Co., Ltd. | | | 128,700 | | | | 2,912,924 | |
Schaeffler AG (Preference Shares) | | | 328,124 | | | | 1,885,164 | |
Schedule of Investments (continued)
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Sri Trang Agro-Industry PCL | | | 4,351,500 | | | $ | 1,756,733 | |
Toyo Tire Corp. | | | 615,894 | | | | 9,479,730 | |
| | | | | | | | |
| | | | | | | 33,370,111 | |
| | | | | | | | |
| Automobiles–0.5% | |
Piaggio & C SpA | | | 1,753,557 | | | | 5,596,846 | |
| | | | | | | | |
| Broadline Retail–0.2% | |
Puuilo Oyj | | | 288,132 | | | | 2,451,495 | |
| | | | | | | | |
| Distributors–0.1% | |
Doshisha Co., Ltd. | | | 35,400 | | | | 527,622 | |
| | | | | | | | |
| Hotels, Restaurants & Leisure–2.8% | |
Domino’s Pizza Group PLC | | | 642,515 | | | | 2,950,722 | |
Entain PLC | | | 410,399 | | | | 4,654,670 | |
Greggs PLC | | | 84,028 | | | | 2,501,570 | |
Jollibee Foods Corp. | | | 2,107,490 | | | | 8,534,777 | |
Jumbo Interactive Ltd. | | | 248,403 | | | | 2,472,523 | |
KFC Holdings Japan Ltd. | | | 58,000 | | | | 1,162,409 | |
Kindred Group PLC | | | 725,438 | | | | 6,617,478 | |
| | | | | | | | |
| | | | | | | 28,894,149 | |
| | | | | | | | |
| Household Durables–1.0% | |
GN Store Nord AS(a) | | | 277,060 | | | | 4,981,313 | |
Ki-Star Real Estate Co., Ltd. | | | 166,100 | | | | 5,128,761 | |
| | | | | | | | |
| | | | | | | 10,110,074 | |
| | | | | | | | |
| Leisure Products–0.9% | |
BRP, Inc. | | | 100,106 | | | | 7,577,322 | |
Sega Sammy Holdings, Inc. | | | 130,500 | | | | 2,406,740 | |
| | | | | | | | |
| | | | | | | 9,984,062 | |
| | | | | | | | |
| Specialty Retail–1.0% | |
ABC-Mart, Inc. | | | 374,100 | | | | 6,723,375 | |
Pet Valu Holdings Ltd. | | | 79,514 | | | | 1,427,827 | |
Sleep Country Canada Holdings, Inc.(b) | | | 114,976 | | | | 1,969,808 | |
| | | | | | | | |
| | | | | | | 10,121,010 | |
| | | | | | | | |
| Textiles, Apparel & Luxury Goods–3.4% | |
Asics Corp. | | | 243,500 | | | | 8,479,056 | |
Eclat Textile Co., Ltd. | | | 433,000 | | | | 6,533,679 | |
Handsome Co., Ltd. | | | 68,710 | | | | 948,068 | |
HUGO BOSS AG | | | 93,739 | | | | 5,925,305 | |
JNBY Design Ltd.(b) | | | 1,072,000 | | | | 1,386,377 | |
Marimekko Oyj | | | 244,347 | | | | 2,715,110 | |
Pandora A/S | | | 19,912 | | | | 2,054,744 | |
Samsonite International SA(a)(b) | | | 2,346,600 | | | | 8,024,729 | |
| | | | | | | | |
| | | | | | | 36,067,068 | |
| | | | | | | | |
| | | | | | | 137,122,437 | |
| | | | | | | | |
| | | | | | | | |
| |
| Financials–12.5% | |
| Banks–6.2% | |
Alpha Services and Holdings SA(a) | | | 3,428,771 | | | | 4,534,294 | |
Banco de Sabadell SA | | | 8,189,620 | | | | 9,474,339 | |
Bank of Ireland Group PLC | | | 1,017,958 | | | | 9,951,162 | |
Bank Pembangunan Daerah Jawa Barat Dan Banten Tbk PT | | | 1,714,600 | | | | 129,801 | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Bank Pembangunan Daerah Jawa Timur Tbk PT | | | 43,073,500 | | | $ | 1,769,762 | |
BAWAG Group AG(b) | | | 148,840 | | | | 6,802,879 | |
BNK Financial Group, Inc. | | | 393,601 | | | | 1,995,583 | |
City Union Bank Ltd. | | | 3,123,994 | | | | 4,753,901 | |
Juroku Financial Group, Inc. | | | 105,000 | | | | 2,626,955 | |
KBC Ancora | | | 50,633 | | | | 2,064,558 | |
Mebuki Financial Group, Inc. | | | 3,406,300 | | | | 9,416,720 | |
Seven Bank Ltd. | | | 593,100 | | | | 1,232,971 | |
Sydbank AS | | | 58,916 | | | | 2,796,630 | |
Virgin Money UK PLC | | | 3,631,593 | | | | 7,426,549 | |
| | | | | | | | |
| | | | | | | 64,976,104 | |
| | | | | | | | |
| Capital Markets–2.1% | |
Azimut Holding SpA | | | 112,489 | | | | 2,447,934 | |
Banca Generali SpA | | | 67,196 | | | | 2,369,908 | |
Intermediate Capital Group PLC | | | 479,434 | | | | 8,047,512 | |
Man Group PLC/Jersey | | | 764,220 | | | | 2,077,164 | |
Monex Group, Inc. | | | 1,340,100 | | | | 4,983,938 | |
Polar Capital Holdings PLC | | | 351,234 | | | | 1,992,714 | |
XTB SA(b) | | | 77,560 | | | | 545,041 | |
| | | | | | | | |
| | | | | | | 22,464,211 | |
| | | | | | | | |
| Consumer Finance–0.5% | |
FinVolution Group (ADR) | | | 481,150 | | | | 2,396,127 | |
Jaccs Co., Ltd. | | | 72,300 | | | | 2,496,036 | |
| | | | | | | | |
| | | | | | | 4,892,163 | |
| | | | | | | | |
| Financial Services–1.7% | |
First National Financial Corp. | | | 75,750 | | | | 1,988,211 | |
Genertec Universal Medical Group Co., Ltd.(b) | | | 3,682,500 | | | | 1,833,727 | |
L&T Finance Holdings Ltd. | | | 5,481,565 | | | | 8,775,982 | |
OSB Group PLC | | | 217,667 | | | | 863,623 | |
REC Ltd. | | | 1,225,998 | | | | 4,243,154 | |
| | | | | | | | |
| | | | | | | 17,704,697 | |
| | | | | | | | |
| Insurance–2.0% | |
Coface SA | | | 160,703 | | | | 2,045,925 | |
Hiscox Ltd. | | | 521,643 | | | | 6,377,941 | |
Protector Forsikring ASA | | | 151,080 | | | | 2,449,106 | |
SCOR SE | | | 268,528 | | | | 8,336,952 | |
UNIQA Insurance Group AG | | | 267,325 | | | | 2,161,817 | |
| | | | | | | | |
| | | | | | | 21,371,741 | |
| | | | | | | | |
| | | | | | | 131,408,916 | |
| | | | | | | | |
| | | | | | | | |
| |
| Information Technology–10.9% | |
| Electronic Equipment, Instruments & Components–3.0% | |
AUO Corp. | | | 11,551,000 | | | | 5,870,336 | |
E Ink Holdings, Inc. | | | 1,717,000 | | | | 9,573,967 | |
Kaga Electronics Co., Ltd. | | | 55,200 | | | | 2,391,231 | |
Mycronic AB | | | 102,920 | | | | 2,122,098 | |
Supreme Electronics Co., Ltd. | | | 1,769,721 | | | | 3,022,647 | |
Test Research, Inc. | | | 909,000 | | | | 1,713,531 | |
Tripod Technology Corp. | | | 1,101,000 | | | | 6,574,922 | |
| | | | | | | | |
| | | | | | | 31,268,732 | |
| | | | | | | | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| IT Services–0.6% | |
Computacenter PLC | | | 70,507 | | | $ | 2,171,048 | |
NSD Co., Ltd. | | | 52,700 | | | | 998,952 | |
Sonata Software Ltd. | | | 239,371 | | | | 3,037,460 | |
| | | | | | | | |
| | | | | | | 6,207,460 | |
| | | | | | | | |
| Semiconductors & Semiconductor Equipment–5.7% | |
ASPEED Technology, Inc. | | | 24,600 | | | | 2,119,103 | |
BE Semiconductor Industries NV | | | 11,273 | | | | 1,102,571 | |
Elan Microelectronics Corp. | | | 421,000 | | | | 1,742,433 | |
King Yuan Electronics Co., Ltd. | | | 467,000 | | | | 1,101,318 | |
LX Semicon Co., Ltd. | | | 25,816 | | | | 1,580,777 | |
Melexis NV | | | 22,677 | | | | 1,951,688 | |
Micronics Japan Co., Ltd. | | | 160,200 | | | | 2,264,531 | |
Nanya Technology Corp. | | | 3,692,000 | | | | 7,524,036 | |
Optorun Co., Ltd. | | | 324,000 | | | | 3,975,128 | |
Phison Electronics Corp. | | | 123,000 | | | | 1,742,289 | |
Rorze Corp. | | | 93,500 | | | | 6,440,057 | |
Sanken Electric Co., Ltd. | | | 167,000 | | | | 10,099,852 | |
SCREEN Holdings Co., Ltd. | | | 51,200 | | | | 2,488,120 | |
Siltronic AG | | | 72,567 | | | | 6,177,463 | |
Sino-American Silicon Products, Inc. | | | 405,000 | | | | 1,975,158 | |
Sitronix Technology Corp. | | | 95,000 | | | | 821,318 | |
Tokyo Seimitsu Co., Ltd. | | | 44,900 | | | | 2,244,877 | |
Ulvac, Inc. | | | 123,400 | | | | 4,446,218 | |
| | | | | | | | |
| | | | | | | 59,796,937 | |
| | | | | | | | |
| Software–1.4% | |
Atoss Software AG | | | 10,516 | | | | 2,172,963 | |
Fortnox AB | | | 388,005 | | | | 2,065,334 | |
IRESS Ltd. | | | 358,807 | | | | 1,334,638 | |
Oracle Financial Services Software Ltd. | | | 57,629 | | | | 2,852,606 | |
Tanla Platforms Ltd. | | | 382,654 | | | | 4,800,102 | |
WingArc1st, Inc. | | | 78,900 | | | | 1,345,813 | |
| | | | | | | | |
| | | | | | | 14,571,456 | |
| | | | | | | | |
| Technology Hardware, Storage & Peripherals–0.2% | |
Asia Vital Components Co., Ltd. | | | 246,000 | | | | 2,617,546 | |
| | | | | | | | |
| | | | | | | 114,462,131 | |
| | | | | | | | |
| | | | | | | | |
| |
| Materials–8.6% | |
| Chemicals–1.9% | |
Castrol India Ltd. | | | 1,421,585 | | �� | | 2,369,299 | |
Dongjin Semichem Co., Ltd. | | | 54,875 | | | | 1,360,588 | |
Gujarat Narmada Valley Fertilizers & Chemicals Ltd. | | | 1,342,724 | | | | 9,849,204 | |
Tosoh Corp. | | | 466,800 | | | | 5,984,886 | |
| | | | | | | | |
| | | | | | | 19,563,977 | |
| | | | | | | | |
| Construction Materials–0.2% | |
CSR Ltd. | | | 687,879 | | | | 2,478,995 | |
| | | | | | | | |
| Containers & Packaging–0.7% | |
Rengo Co., Ltd. | | | 997,300 | | | | 6,839,323 | |
| | | | | | | | |
| Metals & Mining–4.4% | |
APERAM SA | | | 190,280 | | | | 5,526,993 | |
Capstone Mining Corp.(a) | | | 1,605,387 | | | | 6,808,047 | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Central Asia Metals PLC | | | 677,336 | | | $ | 1,553,665 | |
Daiki Aluminium Industry Co., Ltd. | | | 218,200 | | | | 1,903,510 | |
Endeavour Mining PLC | | | 325,805 | | | | 6,385,370 | |
Grange Resources Ltd. | | | 3,535,408 | | | | 1,072,690 | |
Lundin Mining Corp. | | | 892,547 | | | | 6,656,728 | |
OSAKA Titanium Technologies Co. | | | 234,800 | | | | 4,774,221 | |
Outokumpu Oyj | | | 463,710 | | | | 1,941,272 | |
Pan African Resources PLC | | | 6,910,375 | | | | 1,212,428 | |
Perenti Ltd.(a) | | | 2,587,586 | | | | 1,788,977 | |
Shougang Fushan Resources Group Ltd. | | | 6,768,000 | | | | 2,292,233 | |
SSAB AB–Class B | | | 396,385 | | | | 2,174,554 | |
Stelco Holdings, Inc. | | | 70,669 | | | | 1,952,665 | |
| | | | | | | | |
| | | | | | | 46,043,353 | |
| | | | | | | | |
| Paper & Forest Products–1.4% | |
Daiken Corp. | | | 148,700 | | | | 2,975,741 | |
Daio Paper Corp. | | | 663,500 | | | | 5,429,188 | |
Interfor Corp.(a) | | | 419,530 | | | | 6,223,839 | |
| | | | | | | | |
| | | | | | | 14,628,768 | |
| | | | | | | | |
| | | | | | | 89,554,416 | |
| | | | | | | | |
| | | | | | | | |
| |
| Communication Services–8.3% | |
| Diversified Telecommunication Services–0.7% | |
ARTERIA Networks Corp. | | | 160,500 | | | | 2,126,092 | |
Gamma Communications PLC | | | 164,937 | | | | 2,196,031 | |
Telecom Egypt Co. | | | 2,864,433 | | | | 2,773,413 | |
| | | | | | | | |
| | | | | | | 7,095,536 | |
| | | | | | | | |
| Entertainment–3.2% | |
CTS Eventim AG & Co. KGaA | | | 36,799 | | | | 2,088,841 | |
GungHo Online Entertainment, Inc. | | | 387,400 | | | | 6,115,142 | |
International Games System Co., Ltd. | | | 758,000 | | | | 15,336,810 | |
JYP Entertainment Corp. | | | 24,287 | | | | 2,016,712 | |
Soft-World International Corp. | | | 432,000 | | | | 1,291,687 | |
Ubisoft Entertainment SA(a) | | | 219,632 | | | | 7,117,577 | |
| | | | | | | | |
| | | | | | | 33,966,769 | |
| | | | | | | | |
| Interactive Media & Services–1.0% | |
AfreecaTV Co., Ltd. | | | 33,296 | | | | 2,068,113 | |
Hello Group, Inc. (Sponsored ADR) | | | 272,748 | | | | 1,903,781 | |
Kakaku.com, Inc. | | | 464,400 | | | | 4,702,800 | |
Rightmove PLC | | | 194,582 | | | | 1,327,885 | |
| | | | | | | | |
| | | | | | | 10,002,579 | |
| | | | | | | | |
| Media–3.4% | |
4imprint Group PLC | | | 42,490 | | | | 2,708,189 | |
Criteo SA (Sponsored ADR)(a) | | | 247,515 | | | | 7,227,438 | |
Kadokawa Corp. | | | 412,900 | | | | 8,258,649 | |
Perion Network Ltd.(a) | | | 75,453 | | | | 2,321,602 | |
Stroeer SE & Co. KGaA | | | 131,387 | | | | 5,841,545 | |
Sun TV Network Ltd. | | | 1,226,125 | | | | 8,994,861 | |
| | | | | | | | |
| | | | | | | 35,352,284 | |
| | | | | | | | |
| | | | | | | 86,417,168 | |
| | | | | | | | |
| | | | | | | | |
Schedule of Investments (continued)
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
|
| Health Care–7.9% | |
| Biotechnology–1.7% | |
Bavarian Nordic A/S(a) | | | 239,718 | | | $ | 5,363,809 | |
BioGaia AB–Class B | | | 241,049 | | | | 2,221,731 | |
Clinuvel Pharmaceuticals Ltd. | | | 176,177 | | | | 1,662,512 | |
Hugel, Inc.(a) | | | 70,353 | | | | 6,500,106 | |
Takara Bio, Inc. | | | 191,400 | | | | 1,769,271 | |
| | | | | | | | |
| | | | | | | 17,517,429 | |
| | | | | | | | |
| Health Care Equipment & Supplies–2.8% | |
Chularat Hospital PCL–Class F | | | 21,361,600 | | | | 1,912,497 | |
ConvaTec Group PLC(b) | | | 2,644,306 | | | | 7,007,594 | |
Eiken Chemical Co., Ltd. | | | 197,900 | | | | 1,806,130 | |
Getinge AB–Class B | | | 313,464 | | | | 5,508,305 | |
Japan Lifeline Co., Ltd. | | | 315,600 | | | | 2,454,273 | |
LivaNova PLC(a) | | | 167,330 | | | | 8,848,410 | |
Revenio Group Oyj | | | 64,946 | | | | 1,405,832 | |
| | | | | | | | |
| | | | | | | 28,943,041 | |
| | | | | | | | |
| Health Care Providers & Services–0.5% | |
Australian Clinical Labs Ltd.(b) | | | 975,818 | | | | 1,784,854 | |
Odontoprev SA | | | 915,380 | | | | 1,983,167 | |
Solasto Corp. | | | 505,000 | | | | 2,088,872 | |
| | | | | | | | |
| | | | | | | 5,856,893 | |
| | | | | | | | |
| Health Care Technology–0.2% | |
CompuGroup Medical SE & Co. KgaA | | | 45,680 | | | | 1,783,748 | |
| | | | | | | | |
| Pharmaceuticals–2.7% | |
Beijing Tong Ren Tang Chinese Medicine Co., Ltd. | | | 743,000 | | | | 1,224,678 | |
Chong Kun Dang Pharmaceutical Corp. | | | 15,856 | | | | 1,101,988 | |
Consun Pharmaceutical Group Ltd. | | | 3,326,000 | | | | 2,155,252 | |
Dermapharm Holding SE | | | 50,770 | | | | 2,092,848 | |
Faes Farma SA | | | 464,806 | | | | 1,569,855 | |
Hypera SA | | | 1,017,100 | | | | 7,515,113 | |
Laboratorios Farmaceuticos Rovi SA | | | 51,780 | | | | 2,802,625 | |
Mega Lifesciences PCL | | | 2,018,600 | | | | 2,466,947 | |
Procter & Gamble Health Ltd. | | | 20,217 | | | | 1,244,274 | |
Sanofi India Ltd. | | | 32,184 | | | | 2,791,494 | |
United Laboratories International Holdings Ltd. (The) | | | 3,126,000 | | | | 3,159,113 | |
| | | | | | | | |
| | | | | | | 28,124,187 | |
| | | | | | | | |
| | | | | | | 82,225,298 | |
| | | | | | | | |
| | | | | | | | |
| |
| Energy–4.8% | |
| Energy Equipment & Services–0.2% | |
Pason Systems, Inc. | | | 206,922 | | | | 2,053,605 | |
| | | | | | | | |
| Oil, Gas & Consumable Fuels–4.6% | |
Beach Energy Ltd. | | | 8,156,588 | | | | 8,512,554 | |
BLUENORD ASA(a) | | | 34,000 | | | | 1,648,935 | |
BW LPG Ltd.(b) | | | 242,160 | | | | 3,049,455 | |
Cosmo Energy Holdings Co., Ltd. | | | 243,100 | | | | 8,526,703 | |
Enerplus Corp. | | | 483,292 | | | | 8,504,089 | |
Harbour Energy PLC | | | 300,088 | | | | 939,771 | |
Itochu Enex Co., Ltd. | | | 282,900 | | | | 2,849,027 | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Oil Refineries Ltd. | | | 7,120,141 | | | $ | 2,348,295 | |
Parex Resources, Inc. | | | 119,274 | | | | 2,238,391 | |
Petroreconcavo SA | | | 136,400 | | | | 568,226 | |
Serica Energy PLC | | | 567,643 | | | | 1,721,317 | |
Spartan Delta Corp. | | | 226,992 | | | | 676,840 | |
Star Petroleum Refining PCL | | | 4,605,800 | | | | 1,151,055 | |
Thungela Resources Ltd. | | | 69,169 | | | | 634,380 | |
Viva Energy Group Ltd.(b) | | | 1,122,343 | | | | 2,151,104 | |
Whitehaven Coal Ltd. | | | 162,666 | | | | 737,735 | |
Yancoal Australia Ltd. | | | 714,590 | | | | 2,366,086 | |
| | | | | | | | |
| | | | | | | 48,623,963 | |
| | | | | | | | |
| | | | | | | 50,677,568 | |
| | | | | | | | |
| | | | | | | | |
| |
| Real Estate–3.4% | |
| Diversified REITs–0.4% | |
H&R Real Estate Investment Trust | | | 253,823 | | | | 1,724,856 | |
Lar Espana Real Estate Socimi SA | | | 401,600 | | | | 2,352,238 | |
| | | | | | | | |
| | | | | | | 4,077,094 | |
| | | | | | | | |
| Health Care REITs–0.6% | |
Assura PLC | | | 13,426,154 | | | | 6,925,992 | |
| | | | | | | | |
| Industrial REITs–0.2% | |
AIMS APAC REIT | | | 2,363,215 | | | | 2,243,661 | |
| | | | | | | | |
| Office REITs–0.4% | |
AREIT, Inc. | | | 3,346,600 | | | | 1,940,195 | |
Keppel Pacific Oak US REIT(b) | | | 6,659,500 | | | | 1,465,090 | |
Regional REIT Ltd.(b) | | | 3,422,612 | | | | 1,190,140 | |
| | | | | | | | |
| | | | | | | 4,595,425 | |
| | | | | | | | |
| Real Estate Management & Development–0.5% | |
First Capital Real Estate Investment Trust | | | 200,465 | | | | 1,962,956 | |
IWG PLC(a) | | | 822,010 | | | | 1,419,152 | |
Kerry Properties Ltd. | | | 958,000 | | | | 1,624,680 | |
| | | | | | | | |
| | | | | | | 5,006,788 | |
| | | | | | | | |
| Residential REITs–0.2% | |
Morguard North American Residential Real Estate Investment Trust | | | 168,460 | | | | 1,841,805 | |
| | | | | | | | |
| Retail REITs–1.1% | |
Charter Hall Retail REIT | | | 2,633,488 | | | | 5,281,597 | |
Immobiliare Grande Distribuzione SIIQ SpA | | | 825,885 | | | | 1,861,422 | |
Lendlease Global Commercial REIT | | | 4,458,300 | | | | 1,774,002 | |
Mercialys SA | | | 273,277 | | | | 2,459,042 | |
| | | | | | | | |
| | | | | | | 11,376,063 | |
| | | | | | | | |
| | | | | | | 36,066,828 | |
| | | | | | | | |
| | | | | | | | |
| |
| Consumer Staples–3.3% | |
| Beverages–1.6% | |
Heineken Malaysia Bhd | | | 398,300 | | | | 2,063,076 | |
Hite Jinro Co., Ltd. | | | 414,859 | | | | 5,798,370 | |
Royal Unibrew A/S | | | 111,565 | | | | 8,616,211 | |
| | | | | | | | |
| | | | | | | 16,477,657 | |
| | | | | | | | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| Consumer Staples Distribution & Retail–1.4% | |
HelloFresh SE(a) | | | 287,324 | | | $ | 8,537,688 | |
Sendas Distribuidora SA | | | 1,781,953 | | | | 4,310,819 | |
Sonae SGPS SA | | | 1,738,313 | | | | 1,688,280 | |
| | | | | | | | |
| | | | | | | 14,536,787 | |
| | | | | | | | |
| Food Products–0.2% | |
Ta Ann Holdings Bhd | | | 2,657,000 | | | | 1,907,053 | |
| | | | | | | | |
| Personal Care Products–0.1% | |
Industri Jamu Dan Farmasi Sido Muncul Tbk PT | | | 39,580,500 | | | | 1,510,999 | |
| | | | | | | | |
| | | | | | | 34,432,496 | |
| | | | | | | | |
| | | | | | | | |
| |
| Utilities–2.7% | |
| Electric Utilities–0.3% | |
Enerjisa Enerji AS(b) | | | 1,657,880 | | | | 3,123,170 | |
| | | | | | | | |
| Gas Utilities–0.1% | |
Gujarat State Petronet Ltd. | | | 492,179 | | | | 1,669,879 | |
| | | | | | | | |
| Independent Power and Renewable Electricity Producers–1.0% | |
Capital Power Corp. | | | 370,899 | | | | 10,354,861 | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| Multi-Utilities–1.1% | |
Sembcorp Industries Ltd. | | | 3,001,600 | | | $ | 11,156,609 | |
| | | | | | | | |
| Water Utilities–0.2% | |
Cia de Saneamento de Minas Gerais Copasa MG | | | 565,400 | | | | 1,947,076 | |
| | | | | | | | |
| | | | | | | 28,251,595 | |
| | | | | | | | |
Total Common Stocks
(cost $983,463,079) | | | | | | | 1,025,773,989 | |
| | | | | | | | |
| | | | | | | | |
| |
| SHORT-TERM INVESTMENTS–0.7% | |
| Investment Companies–0.7% | |
AB Fixed Income Shares, Inc.–Government Money Market Portfolio–Class AB, 5.25%(c)(d)(e)
(cost $7,579,954) | | | 7,579,954 | | | | 7,579,954 | |
| | | | | | | | |
Total Investments—98.7%
(cost $991,043,033) | | | | 1,033,353,943 | |
| | |
Other assets less liabilities—1.3% | | | | | | | 13,224,405 | |
| | | | | | | | |
| Net Assets—100.0% | | | | | | $ | 1,046,578,348 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| FORWARD CURRENCY EXCHANGE CONTRACTS (see Note 3) | | | | | | | | | | | | | | | | | | |
| Counterparty | | Contracts to
Deliver
(000) | | | In Exchange
For
(000) | | | Settlement
Date | | | Unrealized
Appreciation
(Depreciation) | |
| | | | | | |
Australia and New Zealand Banking Group Ltd. | | USD | | | 2,712 | | | AUD | | | 4,210 | | | | 11/08/2023 | | | $ | (2,376 | ) |
| | | | | | |
Bank of America, NA | | BRL | | | 39,773 | | | USD | | | 7,943 | | | | 10/03/2023 | | | | 29,943 | |
| | | | | | |
Bank of America, NA | | USD | | | 7,983 | | | BRL | | | 39,773 | | | | 10/03/2023 | | | | (70,756 | ) |
| | | | | | |
Bank of America, NA | | USD | | | 4,185 | | | JPY | | | 613,437 | | | | 10/19/2023 | | | | (69,431 | ) |
| | | | | | |
Bank of America, NA | | BRL | | | 39,773 | | | USD | | | 7,948 | | | | 11/03/2023 | | | | 69,901 | |
| | | | | | |
Bank of America, NA | | USD | | | 25,058 | | | AUD | | | 38,667 | | | | 11/08/2023 | | | | (167,130 | ) |
| | | | | | |
Bank of America, NA | | MXN | | | 77,347 | | | USD | | | 4,461 | | | | 11/16/2023 | | | | 55,866 | |
| | | | | | |
Bank of America, NA | | USD | | | 6,192 | | | NOK | | | 66,768 | | | | 12/07/2023 | | | | 60,923 | |
| | | | | | |
Bank of America, NA | | USD | | | 21,014 | | | INR | | | 1,756,005 | | | | 12/14/2023 | | | | 43,610 | |
| | | | | | |
Bank of America, NA | | USD | | | 6,036 | | | CNH | | | 43,861 | | | | 01/11/2024 | | | | (270 | ) |
| | | | | | |
Barclays Bank PLC | | USD | | | 3,992 | | | KRW | | | 5,025,225 | | | | 10/26/2023 | | | | (272,210 | ) |
| | | | | | |
Barclays Bank PLC | | SGD | | | 9,062 | | | USD | | | 6,659 | | | | 11/16/2023 | | | | 17,149 | |
| | | | | | |
Barclays Bank PLC | | USD | | | 5,386 | | | CHF | | | 4,894 | | | | 11/16/2023 | | | | (14,103 | ) |
| | | | | | |
BNP Paribas SA | | ZAR | | | 61,456 | | | USD | | | 3,213 | | | | 11/06/2023 | | | | (23,469 | ) |
| | | | | | |
Citibank, NA | | KRW | | | 7,455,009 | | | USD | | | 5,623 | | | | 10/26/2023 | | | | 105,506 | |
| | | | | | |
Citibank, NA | | PHP | | | 520,529 | | | USD | | | 9,522 | | | | 10/26/2023 | | | | 322,112 | |
| | | | | | |
Citibank, NA | | GBP | | | 7,801 | | | USD | | | 9,727 | | | | 11/17/2023 | | | | 206,784 | |
| | | | | | |
Citibank, NA | | TWD | | | 246,755 | | | USD | | | 7,776 | | | | 11/29/2023 | | | | 91,625 | |
| | | | | | |
Deutsche Bank AG | | USD | | | 12,432 | | | ILS | | | 45,846 | | | | 10/18/2023 | | | | (404,315 | ) |
| | | | | | |
Goldman Sachs Bank USA | | USD | | | 17,294 | | | CHF | | | 15,438 | | | | 11/16/2023 | | | | (349,351 | ) |
| | | | | | |
HSBC Bank USA | | EUR | | | 3,534 | | | USD | | | 3,802 | | | | 10/12/2023 | | | | 64,147 | |
| | | | | | |
HSBC Bank USA | | USD | | | 21,720 | | | KRW | | | 27,692,475 | | | | 10/26/2023 | | | | (1,223,443 | ) |
| | | | | | |
JPMorgan Chase Bank, NA | | USD | | | 2,802 | | | EUR | | | 2,534 | | | | 10/12/2023 | | | | (121,590 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | BRL | | | 39,773 | | | USD | | | 8,078 | | | | 10/03/2023 | | | | 165,448 | |
Schedule of Investments (continued)
| | | | | | | | | | | | | | | | | | | | |
| Counterparty | | Contracts to
Deliver
(000) | | | In Exchange
For
(000) | | | Settlement
Date | | | Unrealized
Appreciation
(Depreciation) | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 7,943 | | | BRL | | | 39,773 | | | | 10/03/2023 | | | $ | (29,943 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | EUR | | | 42,323 | | | USD | | | 46,587 | | | | 10/12/2023 | | | | 1,824,374 | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | EUR | | | 3,579 | | | USD | | | 3,762 | | | | 10/12/2023 | | | | (23,573 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | JPY | | | 3,910,115 | | | USD | | | 27,243 | | | | 10/19/2023 | | | | 1,011,540 | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | KRW | | | 9,458,254 | | | USD | | | 7,245 | | | | 10/26/2023 | | | | 245,066 | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 2,932 | | | MYR | | | 13,601 | | | | 01/11/2024 | | | | (10,700 | ) |
| | | | | | |
State Street Bank & Trust Co. | | USD | | | 3,344 | | | TWD | | | 106,319 | | | | 11/29/2023 | | | | (32,639 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | $ | 1,498,695 | |
| | | | | | | | | | | | | | | | | | | | |
| (a) | | Non-income producing security. |
| (b) | | Security is exempt from registration under Rule 144A or Regulation S of the Securities Act of 1933. These securities are considered restricted, but liquid and may be resold in transactions exempt from registration. At September 30, 2023, the aggregate market value of these securities amounted to $45,409,258 or 4.3% of net assets. |
| (c) | | To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618. |
| (d) | | The rate shown represents the 7-day yield as of period end. |
| (e) | | Affiliated investments. |
Currency Abbreviations:
AUD—Australian Dollar
BRL—Brazilian Real
CHF—Swiss Franc
CNH—Chinese Yuan Renminbi (Offshore)
EUR—Euro
GBP—Great British Pound
ILS—Israeli Shekel
INR—Indian Rupee
JPY—Japanese Yen
KRW—South Korean Won
MXN—Mexican Peso
MYR—Malaysian Ringgit
NOK—Norwegian Krone
PHP—Philippine Peso
SGD—Singapore Dollar
TWD—New Taiwan Dollar
USD—United States Dollar
ZAR—South African Rand
Glossary:
ADR—American Depositary Receipt
REIT—Real Estate Investment Trust
See notes to financial statements.
Schedule of Investments
Bernstein Fund, Inc.
Schedule of Investments
International Strategic Equities Portfolio
September 30, 2023
| | | | | | | | |
| | |
| Company | | Shares | | | U.S. $ Value | |
|
| COMMON STOCKS–97.3% | |
|
| Financials–19.6% | |
| Banks–15.4% | |
ABN AMRO Bank NV(a) | | | 7,053,630 | | | $ | 99,685,805 | |
Banco Bilbao Vizcaya Argentaria SA | | | 20,042,570 | | | | 162,203,077 | |
Banco de Sabadell SA | | | 41,935,140 | | | | 48,513,573 | |
BNP Paribas SA | | | 1,460,590 | | | | 92,873,477 | |
China Merchants Bank Co., Ltd.–Class H | | | 15,442,500 | | | | 64,111,126 | |
Erste Group Bank AG | | | 2,080,299 | | | | 71,847,013 | |
Eurobank Ergasias Services and Holdings SA(b) | | | 24,546,650 | | | | 37,755,257 | |
Hana Financial Group, Inc. | | | 2,012,670 | | | | 63,053,874 | |
KB Financial Group, Inc. | | | 2,521,910 | | | | 102,860,853 | |
KB Financial Group, Inc. (ADR) | | | 347,760 | | | | 14,296,414 | |
Mitsubishi UFJ Financial Group, Inc. | | | 7,014,600 | | | | 59,442,811 | |
NatWest Group PLC | | | 10,392,010 | | | | 29,726,927 | |
Resona Holdings, Inc. | | | 16,730,600 | | | | 92,506,493 | |
Sumitomo Mitsui Financial Group, Inc. | | | 3,172,700 | | | | 155,862,162 | |
| | | | | | | | |
| | | | | | | 1,094,738,862 | |
| | | | | | | | |
| Capital Markets–2.0% | |
B3 SA–Brasil Bolsa Balcao | | | 36,687,600 | | | | 89,701,804 | |
IG Group Holdings PLC | | | 7,132,170 | | | | 55,834,996 | |
| | | | | | | | |
| | | | | | | 145,536,800 | |
| | | | | | | | |
| Insurance–2.2% | |
NN Group NV | | | 1,985,900 | | | | 63,664,334 | |
Ping An Insurance Group Co. of China Ltd.–Class H | | | 16,038,500 | | | | 90,964,684 | |
| | | | | | | | |
| | | | | | | 154,629,018 | |
| | | | | | | | |
| | | | | | | 1,394,904,680 | |
| | | | | | | | |
| | | | | | | | |
| |
| Industrials–16.3% | |
| Aerospace & Defense–1.5% | |
BAE Systems PLC | | | 8,607,920 | | | | 104,602,079 | |
| | | | | | | | |
| Building Products–0.3% | |
Daikin Industries Ltd. | | | 142,200 | | | | 22,292,929 | |
| | | | | | | | |
| Electrical Equipment–4.5% | |
Fuji Electric Co., Ltd. | | | 1,938,400 | | | | 87,297,093 | |
Nexans SA | | | 466,210 | | | | 37,798,428 | |
Prysmian SpA | | | 3,064,740 | | | | 123,013,356 | |
Schneider Electric SE | | | 435,320 | | | | 71,737,285 | |
| | | | | | | | |
| | | | | | | 319,846,162 | |
| | | | | | | | |
| Industrial Conglomerates–1.1% | |
Siemens AG (REG) | | | 543,270 | | | | 77,637,973 | |
| | | | | | | | |
| Machinery–3.8% | |
ANDRITZ AG | | | 837,800 | | | | 42,218,943 | |
IHI Corp. | | | 2,528,400 | | | | 52,993,208 | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Kawasaki Heavy Industries Ltd. | | | 3,692,700 | | | $ | 89,344,396 | |
Toyota Industries Corp. | | | 1,039,500 | | | | 81,824,710 | |
| | | | | | | | |
| | | | | | | 266,381,257 | |
| | | | | | | | |
| Professional Services–3.0% | |
Wolters Kluwer NV | | | 1,788,000 | | | | 216,482,847 | |
| | | | | | | | |
| Trading Companies & Distributors–2.1% | |
Mitsubishi Corp. | | | 3,160,000 | | | | 150,575,034 | |
| | | | | | | | |
| | | | | | | 1,157,818,281 | |
| | | | | | | | |
| | | | | | | | |
| |
| Consumer Discretionary–13.7% | |
| Automobile Components–1.3% | |
Sumitomo Electric Industries Ltd. | | | 7,229,700 | | | | 87,095,592 | |
| | | | | | | | |
| Automobiles–4.4% | |
Honda Motor Co., Ltd. | | | 10,994,400 | | | | 123,683,612 | |
Kia Corp. | | | 962,840 | | | | 57,953,605 | |
Stellantis NV (France) | | | 6,894,417 | | | | 132,102,919 | |
| | | | | | | | |
| | | | | | | 313,740,136 | |
| | | | | | | | |
| Broadline Retail–0.7% | |
Alibaba Group Holding Ltd.(b) | | | 4,719,200 | | | | 51,166,425 | |
| | | | | | | | |
| Hotels, Restaurants & Leisure–0.3% | |
Entain PLC | | | 2,041,146 | | | | 23,150,302 | |
| | | | | | | | |
| Specialty Retail–2.2% | |
Industria de Diseno Textil SA | | | 4,164,110 | | | | 154,955,037 | |
| | | | | | | | |
| Textiles, Apparel & Luxury Goods–4.8% | |
ANTA Sports Products Ltd. | | | 4,216,000 | | | | 47,174,238 | |
Burberry Group PLC | | | 1,475,950 | | | | 34,205,003 | |
Eclat Textile Co., Ltd. | | | 3,461,000 | | | | 52,224,166 | |
LVMH Moet Hennessy Louis Vuitton SE | | | 275,180 | | | | 207,714,237 | |
| | | | | | | | |
| | | | | | | 341,317,644 | |
| | | | | | | | |
| | | | | | | 971,425,136 | |
| | | | | | | | |
| | | | | | | | |
| |
| Information Technology–12.5% | |
| Electronic Equipment, Instruments & Components–1.6% | |
Hon Hai Precision Industry Co., Ltd. | | | 10,747,000 | | | | 34,640,105 | |
Keyence Corp. | | | 38,400 | | | | 14,201,302 | |
Nan Ya Printed Circuit Board Corp. | | | 7,277,000 | | | | 60,310,071 | |
| | | | | | | | |
| | | | | | | 109,151,478 | |
| | | | | | | | |
| Semiconductors & Semiconductor Equipment–8.2% | |
ASML Holding NV | | | 151,150 | | | | 88,989,563 | |
Infineon Technologies AG | | | 1,997,910 | | | | 66,172,254 | |
SCREEN Holdings Co., Ltd. | | | 1,763,400 | | | | 85,694,354 | |
SK Hynix, Inc. | | | 1,097,890 | | | | 92,952,471 | |
Taiwan Semiconductor Manufacturing Co., Ltd. | | | 6,085,000 | | | | 99,223,427 | |
Tokyo Electron Ltd. | | | 400,600 | | | | 54,718,852 | |
United Microelectronics Corp. | | | 67,653,000 | | | | 94,996,066 | |
| | | | | | | | |
| | | | | | | 582,746,987 | |
| | | | | | | | |
| Technology Hardware, Storage & Peripherals–2.7% | |
Quanta Computer, Inc. | | | 6,198,000 | | | | 46,386,518 | |
Samsung Electronics Co., Ltd. | | | 2,502,600 | | | | 126,516,712 | |
Schedule of Investments (continued)
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
Wistron Corp. | | | 6,160,000 | | | $ | 19,507,844 | |
| | | | | | | | |
| | | | | | | 192,411,074 | |
| | | | | | | | |
| | | | | | | 884,309,539 | |
| | | | | | | | |
| | | | | | | | |
| |
| Health Care–10.1% | |
| Pharmaceuticals–10.1% | |
Astellas Pharma, Inc. | | | 5,170,100 | | | | 71,562,551 | |
Novartis AG (REG) | | | 872,300 | | | | 89,086,806 | |
Novo Nordisk A/S–Class B | | | 3,796,480 | | | | 345,673,989 | |
Ono Pharmaceutical Co., Ltd. | | | 1,868,400 | | | | 35,832,863 | |
Roche Holding AG (Genusschein) | | | 175,682 | | | | 47,961,368 | |
Sanofi | | | 1,160,410 | | | | 124,599,312 | |
| | | | | | | | |
| | | | | | | 714,716,889 | |
| | | | | | | | |
| | | | | | | | |
| |
| Consumer Staples–7.1% | |
| Consumer Staples Distribution & Retail–5.1% | |
Coles Group Ltd. | | | 7,187,380 | | | | 71,736,169 | |
Jeronimo Martins SGPS SA | | | 6,903,740 | | | | 155,045,650 | |
Loblaw Cos., Ltd. | | | 1,582,890 | | | | 134,485,924 | |
| | | | | | | | |
| | | | | | | 361,267,743 | |
| | | | | | | | |
| Personal Care Products–2.0% | |
Unilever PLC (London) | | | 2,859,440 | | | | 141,447,317 | |
| | | | | | | | |
| | | | | | | 502,715,060 | |
| | | | | | | | |
| | | | | | | | |
| |
| Energy–6.5% | |
| Oil, Gas & Consumable Fuels–6.5% | |
Petroleo Brasileiro SA (Preference Shares) | | | 19,234,400 | | | | 132,552,071 | |
Repsol SA | | | 10,130,170 | | | | 166,631,213 | |
Shell PLC | | | 5,095,020 | | | | 161,482,665 | |
| | | | | | | | |
| | | | | | | 460,665,949 | |
| | | | | | | | |
| | | | | | | | |
| |
| Materials–4.3% | |
| Construction Materials–1.9% | |
CRH PLC | | | 2,516,630 | | | | 137,735,160 | |
| | | | | | | | |
| Metals & Mining–2.4% | |
ArcelorMittal SA | | | 2,478,830 | | | | 62,060,120 | |
First Quantum Minerals Ltd. | | | 2,561,520 | | | | 60,518,444 | |
Zijin Mining Group Co., Ltd.–Class H | | | 31,638,000 | | | | 47,963,126 | |
| | | | | | | | |
| | | | | | | 170,541,690 | |
| | | | | | | | |
| | | | | | | 308,276,850 | |
| | | | | | | | |
| | | | | | | | |
| |
| Communication Services–3.1% | |
| Entertainment–2.0% | |
Capcom Co., Ltd. | | | 1,321,400 | | | | 47,559,411 | |
Konami Group Corp. | | | 993,300 | | | | 52,371,162 | |
Universal Music Group NV | | | 1,578,020 | | | | 41,180,278 | |
| | | | | | | | |
| | | | | | | 141,110,851 | |
| | | | | | | | |
| | | |
| Company | | Shares | | | U.S. $ Value | |
| Interactive Media & Services–1.1% | |
Tencent Holdings Ltd. | | | 2,040,400 | | | $ | 79,093,926 | |
| | | | | | | | |
| | | | | | | 220,204,777 | |
| | | | | | | | |
| | | | | | | | |
| |
| Utilities–2.6% | |
| Gas Utilities–1.9% | |
Snam SpA | | | 29,354,490 | | | | 137,739,206 | |
| | | | | | | | |
| Multi-Utilities–0.7% | |
Sembcorp Industries Ltd. | | | 13,160,500 | | | | 48,916,096 | |
| | | | | | | | |
| | | | | | | 186,655,302 | |
| | | | | | | | |
| | | | | | | | |
| |
| Real Estate–1.5% | |
| Real Estate Management & Development–1.5% | |
Emaar Properties PJSC | | | 50,128,377 | | | | 109,702,692 | |
| | | | | | | | |
Total Common Stocks
(cost $6,359,346,142) | | | | | | | 6,911,395,155 | |
| | | | | | | | |
| | | | | | | | |
| |
| SHORT-TERM INVESTMENTS–1.2% | |
| Investment Companies–1.2% | |
AB Fixed Income Shares, Inc.–Government Money Market Portfolio–Class AB, 5.25%(c)(d)(e)
(cost $80,788,952) | | | 80,788,952 | | | | 80,788,952 | |
| | | | | | | | |
Total Investments—98.5%
(cost $6,440,135,094) | | | | 6,992,184,107 | |
| | |
Other assets less liabilities—1.5% | | | | | | | 108,360,090 | |
| | | | | | | | |
| Net Assets—100.0% | | | | | | $ | 7,100,544,197 | |
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| |
| FORWARD CURRENCY EXCHANGE CONTRACTS (see Note 3) | |
| Counterparty | | Contracts to
Deliver
(000) | | | In Exchange
For
(000) | | | Settlement
Date | | | Unrealized
Appreciation
(Depreciation) | |
| | | | | | |
Bank of America, NA | | BRL | | | 751,263 | | | USD | | | 150,552 | | | | 10/03/2023 | | | $ | 1,093,485 | |
| | | | | | |
Bank of America, NA | | USD | | | 150,481 | | | BRL | | | 751,263 | | | | 10/03/2023 | | | | (1,022,444 | ) |
| | | | | | |
Bank of America, NA | | USD | | | 14,365 | | | EUR | | | 13,423 | | | | 10/12/2023 | | | | (168,495) | |
| | | | | | |
Bank of America, NA | | KRW | | | 18,410,830 | | | USD | | | 13,962 | | | | 10/26/2023 | | | | 335,647 | |
| | | | | | |
Bank of America, NA | | USD | | | 11,797 | | | KRW | | | 15,514,225 | | | | 10/26/2023 | | | | (314,151 | ) |
| | | | | | |
Bank of America, NA | | BRL | | | 445,216 | | | USD | | | 88,970 | | | | 11/03/2023 | | | | 782,466 | |
| | | | | | |
Bank of America, NA | | USD | | | 317,316 | | | INR | | | 26,516,546 | | | | 12/14/2023 | | | | 658,531 | |
| | | | | | |
Barclays Bank PLC | | EUR | | | 425,289 | | | USD | | | 470,327 | | | | 10/12/2023 | | | | 20,526,398 | |
| | | | | | |
Barclays Bank PLC | | USD | | | 9,816 | | | EUR | | | 9,340 | | | | 10/12/2023 | | | | 62,074 | |
| | | | | | |
Barclays Bank PLC | | USD | | | 27,334 | | | EUR | | | 25,360 | | | | 10/12/2023 | | | | (512,099 | ) |
| | | | | | |
Barclays Bank PLC | | JPY | | | 5,492,665 | | | USD | | | 37,804 | | | | 10/19/2023 | | | | 955,661 | |
| | | | | | |
Barclays Bank PLC | | USD | | | 39,875 | | | JPY | | | 5,881,418 | | | | 10/19/2023 | | | | (417,731 | ) |
| | | | | | |
Barclays Bank PLC | | KRW | | | 23,738,271 | | | USD | | | 18,731 | | | | 10/26/2023 | | | | 1,161,195 | |
| | | | | | |
Barclays Bank PLC | | USD | | | 34,846 | | | KRW | | | 44,420,646 | | | | 10/26/2023 | | | | (1,968,888 | ) |
| | | | | | |
BNP Paribas SA | | EUR | | | 50,998 | | | USD | | | 54,839 | | | | 10/12/2023 | | | | 901,526 | |
| | | | | | |
BNP Paribas SA | | USD | | | 61,813 | | | EUR | | | 57,249 | | | | 10/12/2023 | | | | (1,264,869 | ) |
| | | | | | |
BNP Paribas SA | | JPY | | | 8,744,400 | | | USD | | | 60,038 | | | | 10/19/2023 | | | | 1,374,110 | |
| | | | | | |
BNP Paribas SA | | USD | | | 8,977 | | | TRY | | | 249,728 | | | | 10/20/2023 | | | | (68,387 | ) |
| | | | | | |
BNP Paribas SA | | KRW | | | 27,341,806 | | | USD | | | 20,634 | | | | 10/26/2023 | | | | 397,483 | |
| | | | | | |
BNP Paribas SA | | USD | | | 6,704 | | | CAD | | | 9,154 | | | | 10/27/2023 | | | | 37,837 | |
| | | | | | |
BNP Paribas SA | | USD | | | 14,337 | | | CAD | | | 19,400 | | | | 10/27/2023 | | | | (48,858 | ) |
| | | | | | |
BNP Paribas SA | | USD | | | 14,059 | | | TWD | | | 447,907 | | | | 11/29/2023 | | | | (109,074 | ) |
| | | | | | |
BNP Paribas SA | | USD | | | 29,924 | | | NOK | | | 321,078 | | | | 12/07/2023 | | | | 146,386 | |
| | | | | | |
Citibank, NA | | USD | | | 48,719 | | | EUR | | | 44,739 | | | | 10/12/2023 | | | | (1,401,703 | ) |
| | | | | | |
Citibank, NA | | JPY | | | 2,069,555 | | | USD | | | 14,276 | | | | 10/19/2023 | | | | 392,080 | |
| | | | | | |
Citibank, NA | | USD | | | 15,452 | | �� | PHP | �� | | 844,712 | | | | 10/26/2023 | | | | (522,722 | ) |
| | | | | | |
Citibank, NA | | USD | | | 49,862 | | | AUD | | | 76,885 | | | | 11/08/2023 | | | | (370,162 | ) |
| | | | | | |
Citibank, NA | | USD | | | 15,831 | | | GBP | | | 12,745 | | | | 11/17/2023 | | | | (277,260 | ) |
| | | | | | |
Citibank, NA | | TWD | | | 3,898,809 | | | USD | | | 122,871 | | | | 11/29/2023 | | | | 1,447,702 | |
| | | | | | |
Deutsche Bank AG | | USD | | | 28,319 | | | ILS | | | 104,429 | | | | 10/18/2023 | | | | (920,957 | ) |
| | | | | | |
Goldman Sachs Bank USA | | USD | | | 41,074 | | | THB | | | 1,418,777 | | | | 10/11/2023 | | | | (2,084,170 | ) |
| | | | | | |
Goldman Sachs Bank USA | | USD | | | 13,563 | | | JPY | | | 1,983,319 | | | | 10/19/2023 | | | | (257,315 | ) |
| | | | | | |
Goldman Sachs Bank USA | | CAD | | | 39,213 | | | USD | | | 28,983 | | | | 10/27/2023 | | | | 103,278 | |
| | | | | | |
Goldman Sachs Bank USA | | USD | | | 331,514 | | | CAD | | | 448,136 | | | | 10/27/2023 | | | | (1,467,221 | ) |
| | | | | | |
Goldman Sachs Bank USA | | TWD | | | 373,224 | | | USD | | | 11,796 | | | | 11/29/2023 | | | | 172,414 | |
| | | | | | |
Goldman Sachs Bank USA | | USD | | | 11,471 | | | CNH | | | 83,470 | | | | 01/11/2024 | | | | 15,172 | |
| | | | | | |
HSBC Bank USA | | EUR | | | 662,470 | | | USD | | | 737,585 | | | | 10/12/2023 | | | | 36,932,398 | |
| | | | | | |
HSBC Bank USA | | USD | | | 10,214 | | | EUR | | | 9,719 | | | | 10/12/2023 | | | | 65,018 | |
| | | | | | |
HSBC Bank USA | | USD | | | 14,741 | | | EUR | | | 13,460 | | | | 10/12/2023 | | | | (505,339 | ) |
| | | | | | |
HSBC Bank USA | | JPY | | | 2,742,113 | | | USD | | | 18,537 | | | | 10/19/2023 | | | | 140,917 | |
| | | | | | |
HSBC Bank USA | | USD | | | 59,182 | | | JPY | | | 8,702,664 | | | | 10/19/2023 | | | | (798,587 | ) |
| | | | | | |
HSBC Bank USA | | KRW | | | 330,934,402 | | | USD | | | 259,558 | | | | 10/26/2023 | | | | 14,620,559 | |
| | | | | | |
HSBC Bank USA | | USD | | | 24,601 | | | KRW | | | 32,166,433 | | | | 10/26/2023 | | | | (793,019 | ) |
| | | | | | |
HSBC Bank USA | | USD | | | 4,824 | | | CAD | | | 6,587 | | | | 10/27/2023 | | | | 27,338 | |
| | | | | | |
HSBC Bank USA | | USD | | | 66,590 | | | ZAR | | | 1,277,342 | | | | 11/06/2023 | | | | 674,462 | |
| | | | | | |
HSBC Bank USA | | USD | | | 715 | | | AUD | | | 1,112 | | | | 11/08/2023 | | | | 757 | |
Schedule of Investments (continued)
| | | | | | | | | | | | | | | | | | | | |
| Counterparty | | Contracts to
Deliver
(000) | | | In Exchange
For
(000) | | | Settlement
Date | | | Unrealized
Appreciation
(Depreciation) | |
| | | | | | |
HSBC Bank USA | | USD | | | 4,053 | | | AUD | | | 6,239 | | | | 11/08/2023 | | | $ | (36,798 | ) |
| | | | | | |
HSBC Bank USA | | USD | | | 53,012 | | | MXN | | | 924,524 | | | | 11/16/2023 | | | | (353,084 | ) |
| | | | | | |
HSBC Bank USA | | USD | | | 14,025 | | | TWD | | | 444,304 | | | | 11/29/2023 | | | | (187,697 | ) |
| | | | | | |
JPMorgan Chase Bank, NA | | EUR | | | 10,825 | | | USD | | | 11,927 | | | | 10/12/2023 | | | | 477,762 | |
| | | | | | |
JPMorgan Chase Bank, NA | | CAD | | | 11,489 | | | USD | | | 8,504 | | | | 10/27/2023 | | | | 42,629 | |
| | | | | | |
JPMorgan Chase Bank, NA | | USD | | | 23,943 | | | CAD | | | 32,475 | | | | 10/27/2023 | | | | (25,214 | ) |
| | | | | | |
JPMorgan Chase Bank, NA | | USD | | | 181,781 | | | AUD | | | 281,548 | | | | 11/08/2023 | | | | (543,527 | ) |
| | | | | | |
JPMorgan Chase Bank, NA | | CHF | | | 10,707 | | | USD | | | 11,744 | | | | 11/16/2023 | | | | (7,564 | ) |
| | | | | | |
JPMorgan Chase Bank, NA | | USD | | | 329,781 | | | CHF | | | 293,965 | | | | 11/16/2023 | | | | (7,123,728 | ) |
| | | | | | |
JPMorgan Chase Bank, NA | | USD | | | 11,727 | | | GBP | | | 9,611 | | | | 11/17/2023 | | | | 2,600 | |
| | | | | | |
JPMorgan Chase Bank, NA | | USD | | | 111,061 | | | GBP | | | 88,959 | | | | 11/17/2023 | | | | (2,494,369 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | BRL | | | 139,169 | | | USD | | | 28,266 | | | | 10/03/2023 | | | | 578,917 | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 27,792 | | | BRL | | | 139,169 | | | | 10/03/2023 | | | | (104,774 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | EUR | | | 7,036 | | | USD | | | 7,737 | | | | 10/12/2023 | | | | 295,748 | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 39,350 | | | IDR | | | 592,290,276 | | | | 10/12/2023 | | | | (1,095,241 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 9,213 | | | JPY | | | 1,368,545 | | | | 10/19/2023 | | | | (31,798 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 2,202 | | | CAD | | | 2,985 | | | | 10/27/2023 | | | | (4,071 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 12,156 | | | AUD | | | 18,906 | | | | 11/08/2023 | | | | 13,798 | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 12,517 | | | CLP | | | 11,233,560 | | | | 11/16/2023 | | | | 82,798 | |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 15,126 | | | PLN | | | 63,682 | | | | 11/29/2023 | | | | (570,788 | ) |
| | | | | | |
Morgan Stanley Capital Services, Inc. | | USD | | | 27,624 | | | MYR | | | 128,127 | | | | 01/11/2024 | | | | (100,801 | ) |
| | | | | | |
Natwest Markets PLC | | USD | | | 144,610 | | | SEK | | | 1,601,202 | | | | 12/07/2023 | | | | 2,359,308 | |
| | | | | | |
Natwest Markets PLC | | CNH | | | 82,424 | | | USD | | | 11,336 | | | | 01/11/2024 | | | | (5,873 | ) |
| | | | | | |
Standard Chartered Bank | | USD | | | 33,899 | | | EUR | | | 31,591 | | | | 10/12/2023 | | | | (486,897 | ) |
| | | | | | |
Standard Chartered Bank | | USD | | | 16,420 | | | NZD | | | 27,640 | | | | 10/27/2023 | | | | 146,542 | |
| | | | | | |
State Street Bank & Trust Co. | | USD | | | 6,574 | | | SGD | | | 8,939 | | | | 11/16/2023 | | | | (21,987 | ) |
| | | | | | |
UBS AG | | EUR | | | 314,683 | | | USD | | | 351,021 | | | | 10/12/2023 | | | | 18,200,500 | |
| | | | | | |
UBS AG | | JPY | | | 47,530,683 | | | USD | | | 329,254 | | | | 10/19/2023 | | | | 10,383,173 | |
| | | | | | |
UBS AG | | USD | | | 2,236 | | | AUD | | | 3,450 | | | | 11/08/2023 | | | | (14,595 | ) |
| | | | | | |
UBS AG | | USD | | | 224,061 | | | CNH | | | 1,626,416 | | | | 01/11/2024 | | | | (256,678 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | $ | 86,849,734 | |
| | | | | | | | | | | | | | | | | | | | |
| (a) | | Security is exempt from registration under Rule 144A or Regulation S of the Securities Act of 1933. This security is considered restricted, but liquid and may be resold in transactions exempt from registration. At September 30, 2023, the market value of this security amounted to $99,685,805 or 1.4% of net assets. |
| (b) | | Non-income producing security. |
| (c) | | Affiliated investments. |
| (d) | | The rate shown represents the 7-day yield as of period end. |
| (e) | | To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618. |
Currency Abbreviations:
AUD—Australian Dollar
BRL—Brazilian Real
CAD—Canadian Dollar
CHF—Swiss Franc
CLP—Chilean Peso
CNH—Chinese Yuan Renminbi (Offshore)
EUR—Euro
GBP—Great British Pound
IDR—Indonesian Rupiah
ILS—Israeli Shekel
INR—Indian Rupee
JPY—Japanese Yen
KRW—South Korean Won
MXN—Mexican Peso
MYR—Malaysian Ringgit
NOK—Norwegian Krone
NZD—New Zealand Dollar
PHP—Philippine Peso
PLN—Polish Zloty
SEK—Swedish Krona
SGD—Singapore Dollar
THB—Thailand Baht
TRY—Turkish Lira
TWD—New Taiwan Dollar
USD—United States Dollar
ZAR—South African Rand
Glossary:
ADR—American Depositary Receipt
PJSC—Public Joint Stock Company
REG—Registered Shares
See notes to financial statements.
Statement of Assets and Liabilities—September 30, 2023
| | | | | | | | | | | | |
| | | SMALL CAP CORE
PORTFOLIO | | | INTERNATIONAL
SMALL CAP
PORTFOLIO | | | INTERNATIONAL
STRATEGIC
EQUITIES
PORTFOLIO | |
|
| ASSETS | |
|
Investments in securities at value | |
| | | |
Unaffiliated issuers | | $ | 625,784,699 | | | $ | 1,025,773,989 | | | $ | 6,911,395,155 | |
| | | |
Affiliated issuers | | | 0 | | | | 7,579,954 | | | | 80,788,952 | |
| | | |
Foreign currencies, at value (a) | | | 0 | | | | 4,755,622 | | | | 48,845,593 | |
| | | |
Cash | | | 0 | | | | 0 | | | | 737 | |
| | | |
Cash collateral due from broker | | | 2,448,380 | | | | 1,461,000 | | | | 1,776,000 | |
| | | |
Receivables: | | | | | | | | | | | | |
| | | |
Unaffiliated interest and dividends | | | 486,424 | | | | 4,317,314 | | | | 22,581,951 | |
| | | |
Affiliated dividends | | | 5,071 | | | | 65,514 | | | | 398,846 | |
| | | |
Investment securities sold and foreign currency transactions | | | 108,423,635 | | | | 6,816,016 | | | | 19,109,397 | |
| | | |
Capital shares sold | | | 276,270 | | | | 793,742 | | | | 1,698,693 | |
| | | |
Unrealized appreciation of forward currency exchange contracts | | | 0 | | | | 4,313,994 | | | | 115,608,669 | |
| | | |
Other assets | | | 0 | | | | 2,114,572 | | | | 13,829,913 | |
| | | | | | | | | | | | |
| | | |
Total assets | | | 737,424,479 | | | | 1,057,991,717 | | | | 7,216,033,906 | |
| | | | | | | | | | | | |
|
| LIABILITIES | |
| | | |
Due to custodian | | | 999,246 | | | | 0 | | | | 0 | |
| | | |
Cash collateral due to broker | | | 0 | | | | 848,000 | | | | 16,409,000 | |
| | | |
Payables: | | | | | | | | | | | | |
| | | |
Investment securities purchased and foreign currency transactions | | | 89,430,325 | | | | 4,059,338 | | | | 60,795,572 | |
| | | |
Management fee | | | 437,852 | | | | 880,676 | | | | 3,981,867 | |
| | | |
Capital shares redeemed | | | 259,837 | | | | 506,553 | | | | 3,605,853 | |
| | | |
Foreign capital gains taxes | | | 0 | | | | 1,726,642 | | | | 0 | |
| | | |
Variation margin on futures | | | 1,562,438 | | | | 0 | | | | 0 | |
| | | |
Shareholder servicing fee | | | 1,519 | | | | 11,655 | | | | 75,018 | |
| | | |
Transfer Agent fee | | | 18,135 | | | | 15,685 | | | | 36,324 | |
| | | |
Accrued expenses | | | 202,581 | | | | 549,521 | | | | 1,827,140 | |
| | | |
Unrealized depreciation of forward currency exchange contracts | | | 0 | | | | 2,815,299 | | | | 28,758,935 | |
| | | | | | | | | | | | |
| | | |
Total liabilities | | | 92,911,933 | | | | 11,413,369 | | | | 115,489,709 | |
| | | | | | | | | | | | |
| | | |
NET ASSETS | | $ | 644,512,546 | | | $ | 1,046,578,348 | | | $ | 7,100,544,197 | |
| | | | | | | | | | | | |
|
Cost of investments | |
| | | |
Unaffiliated issuers | | $ | 544,266,095 | | | $ | 983,463,079 | | | $ | 6,359,346,142 | |
| | | |
Affiliated issuers | | | 0 | | | | 7,579,954 | | | | 80,788,952 | |
|
| NET ASSETS CONSIST OF: | |
| | | |
Capital stock, at par | | $ | 5,345 | | | $ | 9,833 | | | $ | 64,549 | |
| | | |
Additional paid-in capital | | | 512,027,903 | | | | 1,053,296,765 | | | | 7,345,721,378 | |
| | | |
Distributable earnings (accumulated loss) | | | 132,479,298 | | | | (6,728,250 | ) | | | (245,241,730 | ) |
| | | | | | | | | | | | |
| | | |
| | $ | 644,512,546 | | | $ | 1,046,578,348 | | | $ | 7,100,544,197 | |
| | | | | | | | | | | | |
(a) Cost: $0, $4,806,155 and $48,992,718, respectively. (Note 1)
See Notes to Financial Statements.
| | | | | | | | | | | | |
| | | SMALL CAP CORE
PORTFOLIO | | | INTERNATIONAL
SMALL CAP
PORTFOLIO | | | INTERNATIONAL
STRATEGIC
EQUITIES
PORTFOLIO | |
|
| CALCULATION OF MAXIMUM OFFERING PRICE | |
|
SCB Class Shares | |
| | | |
Net Assets | | $ | 7,155,795 | | | $ | 55,200,676 | | | $ | 357,763,078 | |
| | | |
Shares of capital stock outstanding | | | 596,340 | | | | 5,195,685 | | | | 32,605,648 | |
| | | | | | | | | | | | |
| | | |
Net asset value, offering and redemption price per share | | $ | 12.00 | | | $ | 10.62 | | | $ | 10.97 | |
| | | | | | | | | | | | |
|
Advisor Class Shares | |
| | | |
Net Assets | | $ | 550,219,099 | | | $ | 784,941,014 | | | $ | 5,698,575,221 | |
| | | |
Shares of capital stock outstanding | | | 45,626,566 | | | | 73,733,484 | | | | 518,086,206 | |
| | | | | | | | | | | | |
| | | |
Net asset value and offering price per share | | $ | 12.06 | | | $ | 10.65 | | | $ | 11.00 | |
| | | | | | | | | | | | |
|
Class Z Shares | |
| | | |
Net Assets | | $ | 87,137,652 | | | $ | 206,436,658 | | | $ | 1,044,205,898 | |
| | | |
Shares of capital stock outstanding | | | 7,230,694 | | | | 19,398,244 | | | | 94,795,398 | |
| | | | | | | | | | | | |
| | | |
Net asset value and offering price per share | | $ | 12.05 | | | $ | 10.64 | | | $ | 11.02 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
Statement of Operations—for the year ended September 30, 2023
| | | | | | | | | | | | |
| | | SMALL CAP CORE
PORTFOLIO | | | INTERNATIONAL
SMALL CAP
PORTFOLIO | | | INTERNATIONAL
STRATEGIC
EQUITIES
PORTFOLIO | |
| | | |
| INVESTMENT INCOME | | | | | | | | | | | | |
| | | |
Income: | | | | | | | | | | | | |
| | | |
Interest | | $ | 41,807 | | | $ | 236,443 | | | $ | 0 | |
| | | |
Dividends | | | | | | | | | | | | |
| | | |
Unaffiliated issuers (a) | | | 10,218,022 | | | | 38,678,267 | | | | 216,162,085 | |
| | | |
Affiliated issuers | | | 183,792 | | | | 739,192 | | | | 3,330,373 | |
| | | |
Other income | | | 4,253 | | | | 7,654 | | | | 53,765 | |
| | | |
| | | | | | | | | | | | |
| | | |
Total income | | | 10,447,874 | | | | 39,661,556 | | | | 219,546,223 | |
| | | |
| | | | | | | | | | | | |
| | | |
Expenses: | | | | | | | | | | | | |
| | | |
Management fee (see Note 2A) | | | 5,403,974 | | | | 11,189,625 | | | | 49,038,256 | |
| | | |
Shareholder servicing fee (see Note 2B) | | | 19,434 | | | | 140,809 | | | | 895,972 | |
| | | |
Custody and accounting fees | | | 84,903 | | | | 341,527 | | | | 1,153,770 | |
| | | |
Transfer Agent fee—SCB Class | | | 3,585 | | | | 13,310 | | | | 19,940 | |
| | | |
Transfer Agent fee—Advisor Class | | | 257,295 | | | | 182,848 | | | | 314,652 | |
| | | |
Transfer Agent fee—Class Z | | | 37,692 | | | | 77,397 | | | | 289,016 | |
| | | |
Directors’ fees and expenses | | | 35,951 | | | | 57,924 | | | | 382,781 | |
| | | |
Legal fees | | | 27,945 | | | | 49,218 | | | | 315,746 | |
| | | |
Auditing and tax fees | | | 48,035 | | | | 158,473 | | | | 173,363 | |
| | | |
Registration fees | | | 57,257 | | | | 59,995 | | | | 64,346 | |
| | | |
Printing fees | | | 9,935 | | | | 17,217 | | | | 11,272 | |
| | | |
Miscellaneous | | | 30,299 | | | | 66,044 | | | | 342,701 | |
| | | |
| | | | | | | | | | | | |
| | | |
Total expenses | | | 6,016,305 | | | | 12,354,387 | | | | 53,001,815 | |
| | | |
Interest expense | | | 0 | | | | 0 | | | | 333,531 | |
| | | |
| | | | | | | | | | | | |
| | | |
Total expenses | | | 6,016,305 | | | | 12,354,387 | | | | 53,335,346 | |
| | | |
Less: expenses waived and reimbursed by the Adviser (see Note 2A and 2E) | | | (4,266 | ) | | | (17,431 | ) | | | (76,752 | ) |
| | | |
| | | | | | | | | | | | |
| | | |
Net expenses | | | 6,012,039 | | | | 12,336,956 | | | | 53,258,594 | |
| | | |
| | | | | | | | | | | | |
| | | |
Net investment income | | | 4,435,835 | | | | 27,324,600 | | | | 166,287,629 | |
| | | |
| | | | | | | | | | | | |
| | | |
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN CURRENCY TRANSACTIONS | | | | | | | | | | | | |
| | | |
Net realized gain (loss) on: | | | | | | | | | | | | |
| | | |
Investment transactions (b) | | | 54,026,816 | | | | (38,988,717 | ) | | | (521,904,739 | ) |
| | | |
Forward currency exchange contracts | | | 0 | | | | (6,910,801 | ) | | | (90,810,609 | ) |
| | | |
Futures | | | (816,878 | ) | | | 0 | | | | 0 | |
| | | |
Foreign currency transactions | | | 0 | | | | (1,095,550 | ) | | | (4,837,118 | ) |
| | | |
| | | | | | | | | | | | |
| | | |
Net realized gain (loss) on investment transactions and foreign currency transactions | | | 53,209,938 | | | | (46,995,068 | ) | | | (617,552,466 | ) |
| | | |
| | | | | | | | | | | | |
| | | |
Net change in unrealized appreciation (depreciation) of: | | | | | | | | | | | | |
| | | |
Investments (c) | | | 28,595,517 | | | | 223,908,330 | | | | 1,624,217,505 | |
| | | |
Forward currency exchange contracts | | | 0 | | | | 2,267,680 | | | | 58,557,937 | |
| | | |
Futures | | | 1,207,275 | | | | 0 | | | | 0 | |
| | | |
Foreign currency denominated assets and liabilities | | | 0 | | | | 485,451 | | | | 2,466,330 | |
| | | |
| | | | | | | | | | | | |
| | | |
Net change in unrealized appreciation (depreciation) of investments and foreign currency denominated assets and liabilities | | | 29,802,792 | | | | 226,661,461 | | | | 1,685,241,772 | |
| | | |
| | | | | | | | | | | | |
| | | |
Net realized and unrealized gain on investment transactions and foreign currency transactions | | | 83,012,730 | | | | 179,666,393 | | | | 1,067,689,306 | |
| | | |
| | | | | | | | | | | | |
| | | |
Net increase in net assets resulting from operations | | $ | 87,448,565 | | | $ | 206,990,993 | | | $ | 1,233,976,935 | |
| | | | | | | | | | | | |
(a) Net of foreign withholding taxes of $26,374, $5,283,107 and $32,131,399, respectively.
(b) Net of foreign realized capital gains taxes of $0, $344 and $21,131, respectively.
(c) Net of increase in accrued foreign capital gains taxes on unrealized gains of $0, $1,180,584 and $0, respectively.
See Notes to Financial Statements.
Statement of Changes in Net Assets
| | | | | | | | | | | | | | | | | | | | |
| | | |
| | | SMALL CAP CORE
PORTFOLIO | | | | | | INTERNATIONAL SMALL CAP
PORTFOLIO | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | | | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | |
|
| INCREASE (DECREASE) IN NET ASSETS FROM | |
|
Operations: | |
| | | | | |
Net investment income | | $ | 4,435,835 | | | $ | 2,967,886 | | | | | | | $ | 27,324,600 | | | $ | 28,022,322 | |
| | | | | |
Net realized gain (loss) on investment transactions and foreign currency transactions | | | 53,209,938 | | | | 56,930,823 | | | | | | | | (46,995,068 | ) | | | (5,709,188 | ) |
| | | | | |
Net change in unrealized appreciation (depreciation) of investments | | | 29,802,792 | | | | (229,689,485 | ) | | | | | | | 226,661,461 | | | | (478,092,970 | ) |
| | | | | |
Contributions from affiliates (see Note 2A) | | | 0 | | | | 3,193 | | | | | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net increase (decrease) in net assets resulting from operations | | | 87,448,565 | | | | (169,787,583 | ) | | | | | | | 206,990,993 | | | | (455,779,836 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Distributions to shareholders (a) | | | (51,799,141 | ) | | | (51,390,345 | ) | | | | | | | (11,869,244 | ) | | | (57,115,368 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Capital-share transactions: | |
| | | | | |
Net proceeds from sales of shares | | | 54,832,435 | | | | 33,932,843 | | | | | | | | 119,128,009 | | | | 99,489,099 | |
| | | | | |
Net proceeds from sales of shares issued to shareholders on reinvestment of dividends | | | 46,414,000 | | | | 38,420,784 | | | | | | | | 9,953,508 | | | | 52,302,647 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total proceeds from shares sold | | | 101,246,435 | | | | 72,353,627 | | | | | | | | 129,081,517 | | | | 151,791,746 | |
| | | | | |
Cost of shares redeemed | | | (112,191,257 | ) | | | (108,838,149 | ) | | | | | | | (282,249,548 | ) | | | (157,104,974 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net decrease in net assets from capital-share transactions | | | (10,944,822 | ) | | | (36,484,522 | ) | | | | | | | (153,168,031 | ) | | | (5,313,228 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net increase (decrease) in net assets | | | 24,704,602 | | | | (257,662,450 | ) | | | | | | | 41,953,718 | | | | (518,208,432 | ) |
|
| NET ASSETS: | |
| | | | | |
Beginning of period | | | 619,807,944 | | | | 877,470,394 | | | | | | | | 1,004,624,630 | | | | 1,522,833,062 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
End of period | | $ | 644,512,546 | | | $ | 619,807,944 | | | | | | | $ | 1,046,578,348 | | | $ | 1,004,624,630 | |
| | | | | | | | | | | | | | | | | | | | |
(a) See page 37 for share class information on dividend distributions for the Small Cap Core and International Small Cap Portfolios.
See Notes to Financial Statements.
Statement of Changes in Net Assets (continued)
| | | | | | | | |
| |
| | | INTERNATIONAL STRATEGIC
EQUITIES PORTFOLIO | |
| | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | |
|
| INCREASE (DECREASE) IN NET ASSETS FROM | |
|
Operations: | |
| | |
Net investment income | | $ | 166,287,629 | | | $ | 265,106,724 | |
| | |
Net realized loss on investment transactions and foreign currency transactions | | | (617,552,466 | ) | | | (257,063,422 | ) |
| | |
Net change in unrealized appreciation (depreciation) of investments | | | 1,685,241,772 | | | | (2,337,930,657 | ) |
| | | | | | | | |
| | |
Net increase (decrease) in net assets resulting from operations | | | 1,233,976,935 | | | | (2,329,887,355 | ) |
| | | | | | | | |
| | |
Distributions to shareholders (a) | | | (284,518,492 | ) | | | (530,917,993 | ) |
| | | | | | | | |
|
Capital-share transactions: | |
| | |
Net proceeds from sales of shares | | | 934,048,321 | | | | 712,367,952 | |
| | |
Net proceeds from sales of shares issued to shareholders on reinvestment of dividends | | | 228,796,446 | | | | 485,839,887 | |
| | | | | | | | |
| | |
Total proceeds from shares sold | | | 1,162,844,767 | | | | 1,198,207,839 | |
| | |
Cost of shares redeemed | | | (1,584,936,534 | ) | | | (927,800,716 | ) |
| | | | | | | | |
| | |
Net increase (decrease) in net assets from capital-share transactions | | | (422,091,767 | ) | | | 270,407,123 | |
| | | | | | | | |
| | |
Net increase (decrease) in net assets | | | 527,366,676 | | | | (2,590,398,225 | ) |
|
| NET ASSETS: | |
| | |
Beginning of period | | | 6,573,177,521 | | | | 9,163,575,746 | |
| | | | | | | | |
| | |
End of period | | $ | 7,100,544,197 | | | $ | 6,573,177,521 | |
| | | | | | | | |
(a) See page 37 for share class information on dividend distributions for the International Strategic Equities Portfolio.
See Notes to Financial Statements.
| | | | | | | | |
| |
| | | SMALL CAP CORE
PORTFOLIO | |
| | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | |
|
Distributions to shareholders: | |
| | |
SCB Class | | $ | (581,765 | ) | | $ | (585,819 | ) |
| | |
Advisor Class | | | (41,711,530 | ) | | | (41,055,925 | ) |
| | |
Class Z | | | (9,505,846 | ) | | | (9,748,601 | ) |
| | | | | | | | |
| | |
| | $ | (51,799,141 | ) | | $ | (51,390,345 | ) |
| | | | | | | | |
| | | | | | | | |
| |
| | | INTERNATIONAL
SMALL CAP
PORTFOLIO | |
| | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | |
|
Distributions to shareholders: | |
| | |
SCB Class | | $ | (393,839 | ) | | $ | (2,505,829 | ) |
| | |
Advisor Class | | | (7,822,705 | ) | | | (35,750,006 | ) |
| | |
Class Z | | | (3,652,700 | ) | | | (18,859,533 | ) |
| | | | | | | | |
| | |
| | $ | (11,869,244 | ) | | $ | (57,115,368 | ) |
| | | | | | | | |
| | | | | | | | |
| |
| | | INTERNATIONAL
STRATEGIC EQUITIES
PORTFOLIO | |
| | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | |
|
Distributions to shareholders: | |
| | |
SCB Class | | $ | (12,438,246 | ) | | $ | (24,555,864 | ) |
| | |
Advisor Class | | | (212,132,679 | ) | | | (385,741,919 | ) |
| | |
Class Z | | | (59,947,567 | ) | | | (120,620,210 | ) |
| | | | | | | | |
| | |
| | $ | (284,518,492 | ) | | $ | (530,917,993 | ) |
| | | | | | | | |
See Notes to Financial Statements.
Financial Highlights
Selected per share data and ratios for a share of capital stock outstanding for each respective Portfolio for each of the periods presented:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | SMALL CAP CORE PORTFOLIO
SCB CLASS | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 11.36 | | | $ | 15.26 | | | $ | 10.39 | | | $ | 10.78 | | | $ | 12.93 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations: | |
| | | | | |
Investment income (loss), net (a)(b) | | | 0.05 | | | | 0.02 | | | | (0.02 | ) | | | 0.02 | | | | 0.02 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.51 | | | | (3.03 | ) | | | 4.93 | | | | (0.39 | ) | | | (1.38 | ) |
| | | | | |
Contributions from affiliates | | | 0 | | | | 0.00 | (c) | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.56 | | | | (3.01 | ) | | | 4.91 | | | | (0.37 | ) | | | (1.36 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.01 | ) | | | 0 | | | | (0.04 | ) | | | (0.02 | ) | | | (0.00 | )(c) |
| | | | | |
Distributions from net realized gain on investment transactions | | | (0.91 | ) | | | (0.89 | ) | | | 0 | | | | 0 | | | | (0.79 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.92 | ) | | | (0.89 | ) | | | (0.04 | ) | | | (0.02 | ) | | | (0.79 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 12.00 | | | $ | 11.36 | | | $ | 15.26 | | | $ | 10.39 | | | $ | 10.78 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d)(e) | | | 14.07% | | | | (21.18)% | | | | 47.30% | | | | (3.42)% | | | | (10.15)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $7,156 | | | | $7,231 | | | | $10,119 | | | | $7,895 | | | | $8,692 | |
| | | | | |
Average net assets (000 omitted) | | | $7,774 | | | | $9,101 | | | | $9,893 | | | | $8,175 | | | | $9,118 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements | | | 1.14% | | | | 1.13% | | | | 1.14% | | | | 1.14% | | | | 1.14% | |
| | | | | |
Expenses, before waivers/reimbursements | | | 1.14% | | | | 1.13% | | | | 1.14% | | | | 1.14% | | | | 1.14% | |
| | | | | |
Net investment income (loss) (b) | | | 0.41% | | | | 0.13% | | | | (0.17)% | | | | 0.19% | | | | 0.19% | |
| | | | | |
Portfolio turnover rate | | | 43% | | | | 34% | | | | 40% | | | | 88% | | | | 61% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
| | | | | | | | | | | | | | | | | | | | |
| |
| | | SMALL CAP CORE PORTFOLIO
ADVISOR CLASS | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 11.42 | | | $ | 15.32 | | | $ | 10.43 | | | $ | 10.82 | | | $ | 12.97 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations | |
| | | | | |
Investment income, net (a)(b) | | | 0.08 | | | | 0.05 | | | | 0.01 | | | | 0.04 | | | | 0.05 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.53 | | | | (3.05 | ) | | | 4.94 | | | | (0.38 | ) | | | (1.38 | ) |
| | | | | |
Contributions from affiliates | | | 0 | | | | 0.00 | (c) | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.61 | | | | (3.00 | ) | | | 4.95 | | | | (0.34 | ) | | | (1.33 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.06 | ) | | | (0.01 | ) | | | (0.06 | ) | | | (0.05 | ) | | | (0.03 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | (0.91 | ) | | | (0.89 | ) | | | 0 | | | | 0 | | | | (0.79 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.97 | ) | | | (0.90 | ) | | | (0.06 | ) | | | (0.05 | ) | | | (0.82 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 12.06 | | | $ | 11.42 | | | $ | 15.32 | | | $ | 10.43 | | | $ | 10.82 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d)(e) | | | 14.41% | | | | (21.02)% | | | | 47.62% | | | | (3.17)% | | | | (9.90)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $550,219 | | | | $500,636 | | | | $702,514 | | | | $531,943 | | | | $734,733 | |
| | | | | |
Average net assets (000 omitted) | | | $558,487 | | | | $632,321 | | | | $687,421 | | | | $688,776 | | | | $724,908 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements | | | 0.89% | | | | 0.88% | | | | 0.89% | | | | 0.89% | | | | 0.89% | |
| | | | | |
Expenses, before waivers/reimbursements | | | 0.89% | | | | 0.88% | | | | 0.89% | | | | 0.89% | | | | 0.89% | |
| | | | | |
Net investment income (b) | | | 0.66% | | | | 0.38% | | | | 0.07% | | | | 0.43% | | | | 0.44% | |
| | | | | |
Portfolio turnover rate | | | 43% | | | | 34% | | | | 40% | | | | 88% | | | | 61% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
Financial Highlights (continued)
Selected per share data and ratios for a share of capital stock outstanding for each respective Portfolio for each of the periods presented:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | SMALL CAP CORE PORTFOLIO
CLASS Z | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 11.42 | | | $ | 15.31 | | | $ | 10.42 | | | $ | 10.82 | | | $ | 12.96 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations | |
| | | | | |
Investment income, net (a)(b) | | | 0.08 | | | | 0.05 | | | | 0.01 | | | | 0.05 | | | | 0.05 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.52 | | | | (3.03 | ) | | | 4.95 | | | | (0.39 | ) | | | (1.37 | ) |
| | | | | |
Contributions from affiliates | | | 0 | | | | 0.00 | (c) | | | 0 | | | | 0 | | | | 0 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.60 | | | | (2.98 | ) | | | 4.96 | | | | (0.34 | ) | | | (1.32 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.06 | ) | | | (0.02 | ) | | | (0.07 | ) | | | (0.06 | ) | | | (0.03 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | (0.91 | ) | | | (0.89 | ) | | | 0 | | | | 0 | | | | (0.79 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.97 | ) | | | (0.91 | ) | | | (0.07 | ) | | | (0.06 | ) | | | (0.82 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 12.05 | | | $ | 11.42 | | | $ | 15.31 | | | $ | 10.42 | | | $ | 10.82 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d)(e) | | | 14.34% | | | | (20.95)% | | | | 47.70% | | | | (3.23)% | | | | (9.80)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $87,138 | | | | $111,941 | | | | $164,837 | | | | $116,488 | | | | $192,161 | |
| | | | | |
Average net assets (000 omitted) | | | $109,237 | | | | $144,065 | | | | $155,037 | | | | $182,516 | | | | $190,252 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements | | | 0.88% | | | | 0.87% | | | | 0.87% | | | | 0.87% | | | | 0.87% | |
| | | | | |
Expenses, before waivers/reimbursements | | | 0.88% | | | | 0.87% | | | | 0.87% | | | | 0.87% | | | | 0.87% | |
| | | | | |
Net investment income (b) | | | 0.68% | | | | 0.39% | | | | 0.10% | | | | 0.46% | | | | 0.46% | |
| | | | | |
Portfolio turnover rate | | | 43% | | | | 34% | | | | 40% | | | | 88% | | | | 61% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL SMALL CAP PORTFOLIO
SCB CLASS | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 8.90 | | | $ | 13.37 | | | $ | 10.40 | | | $ | 10.40 | | | $ | 12.40 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations: | |
| | | | | |
Investment income, net (a)(b) | | | 0.24 | | | | 0.22 | | | | 0.12 | | | | 0.10 | | | | 0.16 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.55 | | | | (4.23 | ) | | | 2.96 | | | | 0.09 | | | | (1.21 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.79 | | | | (4.01 | ) | | | 3.08 | | | | 0.19 | | | | (1.05 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.07 | ) | | | (0.23 | ) | | | (0.11 | ) | | | (0.19 | ) | | | (0.19 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | 0 | | | | (0.23 | ) | | | 0 | | | | 0 | | | | (0.76 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.07 | ) | | | (0.46 | ) | | | (0.11 | ) | | | (0.19 | ) | | | (0.95 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 10.62 | | | $ | 8.90 | | | $ | 13.37 | | | $ | 10.40 | | | $ | 10.40 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d) | | | 20.19% | * | | | (31.01)% | | | | 29.79% | | | | 1.77% | | | | (8.03)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $55,201 | | | | $48,349 | | | | $72,116 | | | | $63,328 | | | | $64,993 | |
| | | | | |
Average net assets (000 omitted) | | | $56,324 | | | | $63,185 | | | | $72,063 | | | | $62,709 | | | | $64,757 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements | | | 1.34% | | | | 1.32% | | | | 1.32% | | | | 1.33% | | | | 1.35% | |
| | | | | |
Expenses, before waivers/reimbursements | | | 1.34% | | | | 1.32% | | | | 1.32% | | | | 1.34% | | | | 1.35% | |
| | | | | |
Net investment income (b) | | | 2.25% | | | | 1.87% | | | | 0.94% | | | | 1.02% | | | | 1.50% | |
| | | | | |
Portfolio turnover rate | | | 50% | | | | 50% | | | | 48% | | | | 58% | | | | 46% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
Financial Highlights (continued)
Selected per share data and ratios for a share of capital stock outstanding for each respective Portfolio for each of the periods presented:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL SMALL CAP PORTFOLIO
ADVISOR CLASS | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 8.93 | | | $ | 13.41 | | | $ | 10.42 | | | $ | 10.43 | | | $ | 12.43 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations | |
| | | | | |
Investment income, net (a)(b) | | | 0.27 | | | | 0.25 | | | | 0.15 | | | | 0.13 | | | | 0.19 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.56 | | | | (4.23 | ) | | | 2.98 | | | | 0.08 | | | | (1.21 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.83 | | | | (3.98 | ) | | | 3.13 | | | | 0.21 | | | | (1.02 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.11 | ) | | | (0.27 | ) | | | (0.14 | ) | | | (0.22 | ) | | | (0.22 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | 0 | | | | (0.23 | ) | | | 0 | | | | 0 | | | | (0.76 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.11 | ) | | | (0.50 | ) | | | (0.14 | ) | | | (0.22 | ) | | | (0.98 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 10.65 | | | $ | 8.93 | | | $ | 13.41 | | | $ | 10.42 | | | $ | 10.43 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d) | | | 20.54% | | | | (30.81)% | | | | 30.22% | | | | 1.90% | | | | (7.70)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $784,940 | | | | $655,455 | | | | $948,393 | | | | $748,799 | | | | $791,765 | |
| | | | | |
Average net assets (000 omitted) | | | $774,138 | | | | $856,686 | | | | $896,897 | | | | $750,872 | | | | $765,916 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements | | | 1.09% | | | | 1.07% | | | | 1.07% | | | | 1.09% | | | | 1.10% | |
| | | | | |
Expenses, before waivers/reimbursements | | | 1.09% | | | | 1.07% | | | | 1.07% | | | | 1.09% | | | | 1.10% | |
| | | | | |
Net investment income (b) | | | 2.51% | | | | 2.14% | | | | 1.22% | | | | 1.27% | | | | 1.77% | |
| | | | | |
Portfolio turnover rate | | | 50% | | | | 50% | | | | 48% | | | | 58% | | | | 46% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL SMALL CAP PORTFOLIO
CLASS Z | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 8.93 | | | $ | 13.41 | | | $ | 10.42 | | | $ | 10.43 | | | $ | 12.43 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations | |
| | | | | |
Investment income, net (a)(b) | | | 0.24 | | | | 0.24 | | | | 0.15 | | | | 0.13 | | | | 0.18 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.58 | | | | (4.22 | ) | | | 2.98 | | | | 0.08 | | | | (1.20 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.82 | | | | (3.98 | ) | | | 3.13 | | | | 0.21 | | | | (1.02 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.11 | ) | | | (0.27 | ) | | | (0.14 | ) | | | (0.22 | ) | | | (0.22 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | 0 | | | | (0.23 | ) | | | 0 | | | | 0 | | | | (0.76 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.11 | ) | | | (0.50 | ) | | | (0.14 | ) | | | (0.22 | ) | | | (0.98 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 10.64 | | | $ | 8.93 | | | $ | 13.41 | | | $ | 10.42 | | | $ | 10.43 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d) | | | 20.42% | | | | (30.81)% | | | | 30.22% | | | | 1.91% | | | | (7.70)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $206,437 | | | | $300,821 | | | | $502,324 | | | | $398,208 | | | | $400,566 | |
| | | | | |
Average net assets (000 omitted) | | | $288,501 | | | | $418,569 | | | | $478,856 | | | | $388,053 | | | | $396,772 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements | | | 1.09% | | | | 1.07% | | | | 1.07% | | | | 1.08% | | | | 1.10% | |
| | | | | |
Expenses, before waivers/reimbursements | | | 1.09% | | | | 1.07% | | | | 1.07% | | | | 1.08% | | | | 1.10% | |
| | | | | |
Net investment income (b) | | | 2.29% | | | | 2.03% | | | | 1.22% | | | | 1.29% | | | | 1.75% | |
| | | | | |
Portfolio turnover rate | | | 50% | | | | 50% | | | | 48% | | | | 58% | | | | 46% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
Financial Highlights (continued)
Selected per share data and ratios for a share of capital stock outstanding for each respective Portfolio for each of the periods presented:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO
SCB CLASS | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | �� | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 9.58 | | | $ | 13.72 | | | $ | 11.58 | | | $ | 11.59 | | | $ | 12.45 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations: | |
| | | | | |
Investment income, net (a)(b) | | | 0.23 | | | | 0.36 | | | | 0.29 | | | | 0.16 | | | | 0.24 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.56 | | | | (3.74 | ) | | | 1.98 | | | | 0.06 | | | | (0.79 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.79 | | | | (3.38 | ) | | | 2.27 | | | | 0.22 | | | | (0.55 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.40 | ) | | | (0.30 | ) | | | (0.13 | ) | | | (0.23 | ) | | | (0.18 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | 0 | | | | (0.46 | ) | | | 0 | | | | 0 | | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.40 | ) | | | (0.76 | ) | | | (0.13 | ) | | | (0.23 | ) | | | (0.31 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 10.97 | | | $ | 9.58 | | | $ | 13.72 | | | $ | 11.58 | | | $ | 11.59 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d) | | | 18.82% | | | | (26.13)% | | | | 19.76% | | | | 1.81% | | | | (4.22)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $357,763 | | | | $312,692 | | | | $445,342 | | | | $172,253 | | | | $175,497 | |
| | | | | |
Average net assets (000 omitted) | | | $358,389 | | | | $402,301 | | | | $404,275 | | | | $171,155 | | | | $168,856 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements (f) | | | 0.96% | | | | 0.94% | | | | 0.95% | | | | 1.00% | | | | 1.00% | |
| | | | | |
Expenses, before waivers/reimbursements (f) | | | 0.96% | | | | 0.94% | | | | 0.95% | | | | 1.00% | | | | 1.00% | |
| | | | | |
Net investment income (b) | | | 2.05% | | | | 2.91% | | | | 2.13% | | | | 1.41% | | | | 2.07% | |
| | | | | |
Portfolio turnover rate | | | 92% | | | | 73% | | | | 86% | | | | 63% | | | | 63% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO
ADVISOR CLASS | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 9.61 | | | $ | 13.76 | | | $ | 11.62 | | | $ | 11.63 | | | $ | 12.50 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations | |
| | | | | |
Investment income, net (a)(b) | | | 0.25 | | | | 0.39 | | | | 0.32 | | | | 0.19 | | | | 0.27 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.58 | | | | (3.75 | ) | | | 1.99 | | | | 0.06 | | | | (0.80 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.83 | | | | (3.36 | ) | | | 2.31 | | | | 0.25 | | | | (0.53 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.44 | ) | | | (0.33 | ) | | | (0.17 | ) | | | (0.26 | ) | | | (0.21 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | 0 | | | | (0.46 | ) | | | 0 | | | | 0 | | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.44 | ) | | | (0.79 | ) | | | (0.17 | ) | | | (0.26 | ) | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 11.00 | | | $ | 9.61 | | | $ | 13.76 | | | $ | 11.62 | | | $ | 11.63 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d) | | | 19.19% | | | | (25.96)% | | | | 20.02% | | | | 2.04% | | | | (4.01)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $5,698,575 | | | | $4,928,516 | | | | $6,617,933 | | | | $2,510,243 | | | | $2,621,316 | |
| | | | | |
Average net assets (000 omitted) | | | $5,656,249 | | | | $6,230,863 | | | | $5,755,397 | | | | $2,529,235 | | | | $2,501,981 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements (f) | | | 0.71% | | | | 0.69% | | | | 0.70% | | | | 0.75% | | | | 0.75% | |
| | | | | |
Expenses, before waivers/reimbursements (f) | | | 0.71% | | | | 0.70% | | | | 0.70% | | | | 0.75% | | | | 0.75% | |
| | | | | |
Net investment income (b) | | | 2.30% | | | | 3.19% | | | | 2.39% | | | | 1.65% | | | | 2.35% | |
| | | | | |
Portfolio turnover rate | | | 92% | | | | 73% | | | | 86% | | | | 63% | | | | 63% | |
See Footnote Summary on page 46.
See Notes to Financial Statements.
Financial Highlights (continued)
Selected per share data and ratios for a share of capital stock outstanding for each respective Portfolio for each of the periods presented:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO
CLASS Z | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
| | | | | |
Net asset value, beginning of period | | $ | 9.62 | | | $ | 13.78 | | | $ | 11.63 | | | $ | 11.64 | | | $ | 12.51 | |
| | | | | | | | | | | | | | | | | | | | |
|
Income from investment operations | |
| | | | | |
Investment income, net (a)(b) | | | 0.24 | | | | 0.37 | | | | 0.30 | | | | 0.19 | | | | 0.26 | |
| | | | | |
Net realized and unrealized gain (loss) on investment transactions and foreign currency transactions | | | 1.59 | | | | (3.74 | ) | | | 2.02 | | | | 0.05 | | | | (0.79 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total from investment operations | | | 1.83 | | | | (3.37 | ) | | | 2.32 | | | | 0.24 | | | | (0.53 | ) |
| | | | | | | | | | | | | | | | | | | | |
|
Less dividends and distributions: | |
| | | | | |
Dividends from net investment income | | | (0.43 | ) | | | (0.33 | ) | | | (0.17 | ) | | | (0.25 | ) | | | (0.21 | ) |
| | | | | |
Distributions from net realized gain on investment transactions | | | 0 | | | | (0.46 | ) | | | 0 | | | | 0 | | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total dividends and distributions | | | (0.43 | ) | | | (0.79 | ) | | | (0.17 | ) | | | (0.25 | ) | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net asset value, end of period | | $ | 11.02 | | | $ | 9.62 | | | $ | 13.78 | | | $ | 11.63 | | | $ | 11.64 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total return (d) | | | 19.25% | | | | (26.01)% | | | | 20.07% | | | | 2.02% | | | | (4.02)% | |
|
| RATIOS/SUPPLEMENTAL DATA | |
| | | | | |
Net assets, end of period (000 omitted) | | | $1,044,206 | | | | $1,331,970 | | | | $2,100,301 | | | | $1,349,824 | | | | $1,359,213 | |
| | | | | |
Average net assets (000 omitted) | | | $1,325,072 | | | | $1,811,737 | | | | $2,067,177 | | | | $1,331,995 | | | | $1,331,620 | |
|
Ratio to average net assets of: | |
| | | | | |
Expenses, net of waivers/reimbursements (f) | | | 0.73% | | | | 0.71% | | | | 0.71% | | | | 0.76% | | | | 0.76% | |
| | | | | |
Expenses, before waivers/reimbursements (f) | | | 0.73% | | | | 0.71% | | | | 0.71% | | | | 0.76% | | | | 0.76% | |
| | | | | |
Net investment income (b) | | | 2.16% | | | | 3.03% | | | | 2.26% | | | | 1.65% | | | | 2.31% | |
| | | | | |
Portfolio turnover rate | | | 92% | | | | 73% | | | | 86% | | | | 63% | | | | 63% | |
| (a) | | Based on average shares outstanding. |
| (b) | | Net of expenses waived by the Adviser. |
| (c) | | Amount is less than $.005. |
| (d) | | Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized. |
| (e) | | Includes the impact of proceeds received and credited to the Portfolio resulting from the class action settlements, which enhanced the performance for the Small Cap Core Portfolio for the year ended September 30, 2021 by 0.01%. |
| (f) | | The expense ratios, excluding interest expense are: |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | YEAR
ENDED
9/30/21 | | | YEAR
ENDED
9/30/20 | | | YEAR
ENDED
9/30/19 | |
International Strategic Equities Portfolio | |
SCB Class | |
Net of waivers/reimbursements | | | .96% | | | | .94% | | | | .95% | | | | 1.00% | | | | 1.00% | |
Before waivers/reimbursements | | | .96% | | | | .94% | | | | .95% | | | | 1.00% | | | | 1.00% | |
Advisor Class | |
Net of waivers/reimbursements | | | .71% | | | | .69% | | | | .70% | | | | .75% | | | | .75% | |
Before waivers/reimbursements | | | .71% | | | | .70% | | | | .70% | | | | .75% | | | | .75% | |
Class Z | |
Net of waivers/reimbursements | | | .72% | | | | .71% | | | | .71% | | | | .76% | | | | .76% | |
Before waivers/reimbursements | | | .72% | | | | .71% | | | | .71% | | | | .76% | | | | .76% | |
| * | | The net asset value and total return include adjustments in accordance with accounting principles generally accepted in the United States of America for financial reporting purposes. As such, the net asset value and total return for shareholder transactions may differ from financial statements. |
See Notes to Financial Statements.
Notes to Financial Statements
| NOTE 1. | Organization and Significant Accounting Policies |
Bernstein Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940 as an open-end registered investment company. The Fund, which is a Maryland corporation, operates as a series company currently comprised of three portfolios: Small Cap Core Portfolio, International Small Cap Portfolio and International Strategic Equities Portfolio (hereafter collectively referred to as the “Portfolios” and each individually a “Portfolio”).
The Fund’s Portfolios offer the following share classes: SCB Class, Advisor Class and Class Z. Class Z shares are currently offered exclusively to registered investment companies (or their series) managed by AllianceBernstein L.P. (the “Adviser”). Each Portfolio has its own investment objectives. Each class of shares has identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan, as applicable. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Each Portfolio is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Portfolios.
Portfolio securities are valued at market value determined on the basis of market quotations or, if market quotations are not readily available or are unreliable, at “fair value” as determined in accordance with procedures approved by and under the oversight of the Portfolios’ Board of Directors (the “Board”). Pursuant to these procedures, the Adviser serves as the Portfolios’ valuation designee pursuant to Rule 2a-5 of the 1940 Act. In this capacity, the Adviser is responsible, among other things, for making all fair value determinations relating to the Portfolios’ portfolio investments, subject to the Board’s oversight.
In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”)) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter (“OTC”) market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, the Adviser will have discretion to determine the best valuation (e.g., last trade price in the case of listed options); open futures are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for short term securities that have an original maturity of 60 days or less, as well as short term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the “Committee”) must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open-end mutual funds are valued at the closing net asset value per share, while exchange traded funds are valued at the closing market price per share.
Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value as deemed appropriate by the Adviser. Factors considered in making this determination may
Notes to Financial Statements (continued)
include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer’s financial statements or other available documents. In addition, the Portfolios may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Portfolios value their securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Portfolios generally value many of their foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.
| B. | | Fair Value Measurements |
In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Portfolios would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Portfolios. Unobservable inputs reflect the Portfolios’ own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
| | • | | Level 1—quoted prices in active markets for identical investments |
| | • | | Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| | • | | Level 3—significant unobservable inputs (including the Portfolios’ own assumptions in determining the fair value of investments) |
The fair value of debt instruments, such as bonds, and over-the-counter derivatives is generally based on market price quotations, recently executed market transactions (where observable) or industry recognized modeling techniques and are generally classified as Level 2. Pricing vendor inputs to Level 2 valuations may include quoted prices for similar investments in active markets, interest rate curves, coupon rates, currency rates, yield curves, option adjusted spreads, default rates, credit spreads and other unique security features in order to estimate the relevant cash flows which are then discounted to calculate fair values. If these inputs are unobservable and significant to the fair value, these investments will be classified as Level 3.
Where readily available market prices or relevant bid prices are not available for certain equity investments, such investments may be valued based on similar publicly traded investments, movements in relevant indices since last available prices or based upon underlying company fundamentals and comparable company data (such as multiples to earnings or other multiples to equity). Where an investment is valued using an observable input, such as another publicly traded security, the investment will be classified as Level 2. If management determines that an adjustment is appropriate based on restrictions on resale, illiquidity or uncertainty, and such adjustment is a significant component of the valuation, the investment will be classified as Level 3. An investment will also be classified as Level 3 where management uses company fundamentals and other significant inputs to determine the valuation.
The following tables summarize the valuation of the Portfolios’ investments by the above fair value hierarchy levels as of September 30, 2023:
| | | | | | | | | | | | | | | | |
SMALL CAP CORE PORTFOLIO INVESTMENTSIN SECURITIES: | | LEVEL 1 | | | LEVEL 2 | | | LEVEL 3 | | | TOTAL | |
| | | | |
Assets: | | | | | | | | | | | | | | | | |
| | | | |
Common Stocks (a) | | $ | 625,784,699 | | | $ | 0 | | | $ | 0 | | | $ | 625,784,699 | |
| | | | |
Total Investments in Securities | | | 625,784,699 | | | | 0 | | | | 0 | | | | 625,784,699 | |
| | | | |
Other Financial Instruments (b): | | | | | | | | | | | | | | | | |
| | | | |
Assets | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
| | | | |
Futures | | | (740,208 | ) | | | 0 | | | | 0 | | | | (740,208 | )(c) |
| | | | |
Total | | $ | 625,044,491 | | | $ | 0 | | | $ | 0 | | | $ | 625,044,491 | |
| | | | |
INTERNATIONAL SMALL CAP PORTFOLIO INVESTMENTSIN SECURITIES: | | LEVEL 1 | | | LEVEL 2 | | | LEVEL 3 | | | TOTAL | |
| | | | |
Assets: | | | | | | | | | | | | | | | | |
Common Stocks: | | | | | | | | | | | | | | | | |
| | | | |
Industrials | | $ | 54,914,725 | | | $ | 180,240,411 | | | $ | 0 | | | $ | 235,155,136 | |
| | | | |
Consumer Discretionary | | | 25,274,924 | | | | 111,847,513 | | | | 0 | | | | 137,122,437 | |
| | | | |
Financials | | | 8,821,656 | | | | 122,587,260 | | | | 0 | | | | 131,408,916 | |
| | | | |
Information Technology | | | 0 | | | | 114,462,131 | | | | 0 | | | | 114,462,131 | |
| | | | |
Materials | | | 30,792,742 | | | | 58,761,674 | | | | 0 | | | | 89,554,416 | |
| | | | |
Communication Services | | | 9,131,219 | | | | 77,285,949 | | | | 0 | | | | 86,417,168 | |
| | | | |
Health Care | | | 21,812,695 | | | | 60,412,603 | | | | 0 | | | | 82,225,298 | |
| | | | |
Energy | | | 17,724,986 | | | | 32,952,582 | | | | 0 | | | | 50,677,568 | |
| | | | |
Real Estate | | | 20,822,424 | | | | 15,244,404 | | | | 0 | | | | 36,066,828 | |
| | | | |
Consumer Staples | | | 9,791,947 | | | | 24,640,549 | | | | 0 | | | | 34,432,496 | |
| | | | |
Utilities | | | 12,301,937 | | | | 15,949,658 | | | | 0 | | | | 28,251,595 | |
| | | | |
Short-Term Investments | | | 7,579,954 | | | | 0 | | | | 0 | | | | 7,579,954 | |
| | | | |
Total Investments in Securities | | | 218,969,209 | | | | 814,384,734 | (d) | | | 0 | | | | 1,033,353,943 | |
| | | | |
Other Financial Instruments (b): | | | | | | | | | | | | | | | | |
| | | | |
Assets: | | | | | | | | | | | | | | | | |
| | | | |
Forward Currency Exchange Contracts | | | 0 | | | | 4,313,994 | | | | 0 | | | | 4,313,994 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
| | | | |
Forward Currency Exchange Contracts | | | 0 | | | | (2,815,299 | ) | | | 0 | | | | (2,815,299 | ) |
| | | | |
Total | | $ | 218,969,209 | | | $ | 815,883,429 | | | $ | 0 | | | $ | 1,034,852,638 | |
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | | | |
INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO
INVESTMENTSIN SECURITIES: | | LEVEL 1 | | | LEVEL 2 | | | LEVEL 3 | | | TOTAL | |
| | | | |
Assets: | | | | | | | | | | | | | | | | |
Common Stocks: | | | | | | | | | | | | | | | | |
| | | | |
Financials | | $ | 103,998,218 | | | $ | 1,290,906,462 | | | $ | 0 | | | $ | 1,394,904,680 | |
| | | | |
Industrials | | | 0 | | | | 1,157,818,281 | | | | 0 | | | | 1,157,818,281 | |
| | | | |
Consumer Discretionary | | | 0 | | | | 971,425,136 | | | | 0 | | | | 971,425,136 | |
| | | | |
Information Technology | | | 0 | | | | 884,309,539 | | | | 0 | | | | 884,309,539 | |
| | | | |
Health Care | | | 0 | | | | 714,716,889 | | | | 0 | | | | 714,716,889 | |
| | | | |
Consumer Staples | | | 134,485,924 | | | | 368,229,136 | | | | 0 | | | | 502,715,060 | |
| | | | |
Energy | | | 132,552,071 | | | | 328,113,878 | | | | 0 | | | | 460,665,949 | |
| | | | |
Materials | | | 198,253,604 | | | | 110,023,246 | | | | 0 | | | | 308,276,850 | |
| | | | |
Communication Services | | | 0 | | | | 220,204,777 | | | | 0 | | | | 220,204,777 | |
| | | | |
Utilities | | | 0 | | | | 186,655,302 | | | | 0 | | | | 186,655,302 | |
| | | | |
Real Estate | | | 0 | | | | 109,702,692 | | | | 0 | | | | 109,702,692 | |
| | | | |
Short-Term Investments | | | 80,788,952 | | | | 0 | | | | 0 | | | | 80,788,952 | |
| | | | |
Total Investments in Securities | | | 650,078,769 | | | | 6,342,105,338 | (d) | | | 0 | | | | 6,992,184,107 | |
| | | | |
Other Financial Instruments (b): | | | | | | | | | | | | | | | | |
| | | | |
Assets: | | | | | | | | | | | | | | | | |
| | | | |
Forward Currency Exchange Contracts | | | 0 | | | | 115,608,669 | | | | 0 | | | | 115,608,669 | |
| | | | |
Liabilities: | | | | | | | | | | | | | | | | |
| | | | |
Forward Currency Exchange Contracts | | | 0 | | | | (28,758,935 | ) | | | 0 | | | | (28,758,935 | ) |
| | | | |
Total | | $ | 650,078,769 | | | $ | 6,428,955,072 | | | $ | 0 | | | $ | 7,079,033,841 | |
| | (a) | See Schedule of Investments for sector classifications. |
| | (b) | Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation (depreciation) on the instrument. Other financial instruments may also include swaps with upfront premiums, written options and written swaptions which are valued at market value. |
| | (c) | Only variation margin receivable (payable) at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation (depreciation) on futures and centrally cleared swaps as reported in the schedule of investments. Where applicable, centrally cleared swaps with upfront premiums are presented here at market value. |
| | (d) | A significant portion of the Portfolio’s foreign equity investments are categorized as Level 2 investments since they are valued using fair value prices based on third party vendor modeling tools to the extent available, see Note 1.A. |
| C. | | Foreign Currency Translation |
The accounting records of the Portfolios are maintained in U.S. dollars. Prices of securities and other assets and liabilities denominated in non-U.S. currencies are translated into U.S. dollars using the exchange rate at 4:00 p.m., Eastern Time. Amounts related to the purchases and sales of securities, investment income and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions.
Net realized gain or loss on foreign currency transactions represents net foreign exchange gains or losses from the disposition of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions and the difference between the amount of dividends, interest and foreign withholding taxes recorded on the Portfolios’ books and the U.S. dollar equivalent amount actually received or paid. Net unrealized currency gains and losses arising from valuing foreign currency denominated assets and liabilities, other than security investments, at the current exchange rate are reflected as part of unrealized appreciation/depreciation on foreign currencies.
The Portfolios do not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of securities held at period end. The Portfolios do isolate the effect of changes in foreign exchange rates from changes in market prices of securities sold during the year, as required by the Internal Revenue Code. The International Small Cap Portfolio and International Strategic Equities Portfolio may invest in foreign securities and foreign currency transactions that may involve risks not associated with domestic investments as a result of the level of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability, among others.
Each Portfolio is treated as a separate entity for federal income tax purposes. Each Portfolio intends to continue to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986 as they apply to regulated investment companies. By so complying, each Portfolio will not be subject to federal and state income taxes to the extent that all of its income is distributed. The Portfolios may be subject to taxes imposed by countries in which they invest. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and net unrealized appreciation/depreciation as such income and/or gains are earned based on, management’s understanding of applicable local tax law.
In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Portfolios’ tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Portfolios’ financial statements. As of September 30, 2023, the Portfolios did not have any unrecognized tax benefits.
| E. | | Security Transactions and Related Investment Income |
Security transactions are accounted for on the trade date (the date the buy or sell order is executed). Securities gains and losses are calculated on the identified cost basis. Interest income is recorded on the accrual basis and dividend income is recorded on the ex-dividend date or as soon as the Portfolios are informed of the dividend. Non-cash dividends, if any, are recorded on the ex-dividend date at the fair value of the securities received. The Portfolios amortize premiums and accrete discounts as adjustments to interest income. The Portfolio accounts for distributions received from REIT investments or from regulated investment companies as dividend income, realized gain, or return of capital based on information provided by the REIT or the investment company.
All income earned and expenses incurred by the Portfolios are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Portfolio represented by the shares of such class, except for class specific expenses which are allocated to the respective class. Expenses of the Fund are charged proportionately to each Portfolio or based on other appropriate methods. Realized and unrealized gains and losses are allocated among the various share classes based on respective net assets.
| G. | | Distribution of Income and Gains |
Dividends from net investment income, if any, will be paid to shareholders at least once a year.
Distributions of net realized gains, less any available loss carryforwards, if any, for all the Portfolios will be paid to shareholders at least once a year, and recorded on the ex-dividend date.
Elements of realized gains and net investment income may be recorded in different accounting periods for financial reporting (book) and federal income tax (tax) purposes (temporary differences). To the extent that such distributions required for tax purposes exceed income and gains recorded for book purposes as a result of such temporary differences, “excess distributions” are reflected in the accompanying statement of assets and liabilities. To the extent distributions exceed income and gains for tax purposes, such distributions would be shown as “return of capital” on the statement of changes in net assets. Certain other differences—permanent differences—arise because treatment of elements of income and gains is different between book and tax accounting. Permanent differences are reclassified in the year they arise.
Notes to Financial Statements (continued)
Permanent differences have no effect on net assets. The effects of such permanent differences on each Portfolio, due to the utilization of earnings and profits distributed to shareholders on redemption of shares which are reflected as adjustments to the components of net assets as of September 30, 2023, as shown below:
| | | | | | | | |
| PORTFOLIO | | INCREASE (DECREASE)
TO ADDITIONAL
PAID-IN CAPITAL | | | INCREASE (DECREASE)
TO DISTRIBUTABLE
EARNINGS/
ACCUMULATED LOSS | |
Small Cap Core | | $ | 4,883,905 | | | $ | (4,883,905 | ) |
| | |
International Small Cap | | | 1,246,098 | | | | (1,246,098 | ) |
| | |
International Strategic Equities | | | 0 | | | | 0 | |
| NOTE 2. | Investment Management and Transactions with Affiliated Persons |
Under the Investment Management Agreement between the Fund and the Adviser, the Adviser manages the investment of each Portfolio’s assets, places purchase and sale orders, and bears various expenses, including the salaries and expenses of all personnel except those of outside directors. In addition, the Adviser agrees to permit its directors, officers and employees who may be elected directors or officers of the Fund to serve in the capacities to which they are elected. The Adviser renders these services subject to the general oversight of the Board.
The Portfolios pay the Adviser an investment management fee at an annualized rate as follows:
Small Cap Core Portfolio: 0.80% of the Portfolio’s average daily net assets.
International Small Cap Portfolio: 1.00% of the Portfolio’s average daily net assets.
| | | | | | | | | | | | |
| ANNUAL PERCENTAGEOF AVERAGE DAILY NET ASSETSOF EACH PORTFOLIO | |
| | | FIRST $2.5 BILLION | | | NEXT $2.5 BILLION | | | THEREAFTER | |
| International Strategic Equities | | | 0.75 | % | | | 0.65 | % | | | 0.60 | % |
The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit the total portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB mutual funds in which the Portfolios may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs) as a percentage of daily average net assets on an annual basis (the “Expense Caps”) as follows:
| | | | | | | | | | | | |
| PORTFOLIO | | SCB CLASS | | | ADVISOR CLASS | | | CLASS Z | |
| Small Cap Core | | | 1.30 | % | | | 1.05 | % | | | 1.05 | % |
| | | |
| International Small Cap | | | 1.35 | % | | | 1.10 | % | | | 1.10 | % |
The Expense Caps described above for Small Cap Core and International Small Cap may not be terminated by the Adviser before January 28, 2024. During the year ended September 30, 2023, there were no such reimbursement/waivers.
During the year ended September 30, 2022, the Adviser reimbursed the Small Cap Core Portfolio $3,193 for trading losses incurred due to trade entry errors.
| B. | | Shareholder Servicing Fee; Transfer Agency Fee |
Under the Shareholder Servicing Agreement between the Fund and the Adviser, the Adviser pays expenses it incurs in providing shareholder servicing to the Fund, the Portfolios and individual shareholders. Such services include, but are not limited to, providing information to shareholders concerning their fund investments, systematic withdrawal plans, fund dividend payments and reinvestments, shareholder account or transactions status, net asset value of shares, fund
performance, fund services, plans and options, fund investment policies, portfolio holdings and tax consequences of fund investments; dealing with shareholder complaints and other correspondence relating to fund matters; and communications with shareholders when proxies are being solicited from them with respect to voting their fund shares. Under the agreement, the fee paid by each Portfolio to the Adviser for services is 0.25% of the average daily net assets of SCB Class Shares.
The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub accounting services and/or networking services. For the year ended September 30, 2023, the compensation retained by ABIS amounted to: Small Cap Core Portfolio, $199,520; International Small Cap Portfolio, $196,168; and International Strategic Equities Portfolio, $489,771.
| C. | | Distribution Arrangements—the Portfolios Except the Retail Classes |
Under the Distribution Agreement between the Fund, on behalf of each Portfolio, and Sanford C. Bernstein & Co., LLC (the “Distributor”), the Distributor agrees to act as agent to sell SCB Class shares of the Portfolios. The Distributor receives no fee for this service, and furthermore agrees to pay all expenses arising from the performance of its obligations under this agreement. The Distributor is a wholly owned subsidiary of the Adviser.
| D. | | Distribution Arrangements—the Retail Classes Only |
The Fund has entered into a Distribution Services Agreement (the “Agreement”) with AllianceBernstein Investments, Inc., (the “Retail Distributor”), to permit the Retail Distributor to distribute the Portfolios’ Advisor Class and Class Z shares, as applicable, and to permit the Fund to pay distribution services fees to defray expenses associated with the distribution of the Portfolios’ Class A and Class C shares in accordance with a plan of distribution which is included in the Agreement and which has been duly adopted and approved in accordance with Rule 12b-1 under the under the Investment Company Act of 1940 (the “Rule 12b-1 Plan”). Advisor Class shares and Class Z shares are not subject to Rule 12b-1 asset-based sales charges.
| E. | | Investments in Affiliated Issuers |
The Portfolios may invest in AB Government Money Market Portfolio (the “Government Money Market Portfolio”), advised by the Adviser, which has a contractual annual advisory fee rate of .20% of the portfolio’s average daily net assets and bears its own expenses. The Adviser had contractually agreed to waive .10% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .10%) until August 31, 2023. Effective September 1, 2023, the Adviser has contractually agreed to waive .05% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .15%) until August 31, 2024. In connection with the investment by the Portfolios in Government Money Market Portfolio, the Adviser has contractually agreed to waive its advisory fee from the Portfolios in an amount equal to each Portfolio’s pro rata share of the effective advisory fee of Government Money Market Portfolio, as borne indirectly by the Portfolios as an acquired fund fee and expense.
For the year ended September 30, 2023, such waivers amounted to:
| | | | |
| PORTFOLIO | | AMOUNT | |
Small Cap Core | | $ | 4,266 | |
| |
International Small Cap | | | 17,431 | |
| |
International Strategic Equities | | | 76,752 | |
Notes to Financial Statements (continued)
A summary of the Portfolios’ transactions in shares of the Government Money Market Portfolio for the year ended September 30, 2023 is as follows:
| | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO | | MARKET VALUE 9/30/22 (000) | | | PURCHASES AT COST (000) | | | SALES PROCEEDS (000) | | | MARKET VALUE 9/30/23 (000) | | | DIVIDEND INCOME (000) | |
Small Cap Core | | $ | 1,374 | | | $ | 103,872 | | | $ | 105,246 | | | $ | 0 | | | $ | 184 | |
| | | | | |
International Small Cap | | | 18,404 | | | | 215,294 | | | | 226,118 | | | | 7,580 | | | | 739 | |
| | | | | |
International Strategic Equities | | | 74,286 | | | | 1,941,575 | | | | 1,935,072 | | | | 80,789 | | | | 3,330 | |
| NOTE 3. | Investment Security Transactions |
For the year ended September 30, 2023, the Portfolios had purchases and sales transactions, excluding transactions in short-term instruments, as follows:
| | | | | | | | | | | | | | | | |
| PORTFOLIO | | PURCHASES EXCLUDING U.S. GOVERNMENT SECURITIES | | | PURCHASESOF U.S. GOVERNMENT SECURITIES | | | SALES EXCLUDING U.S. GOVERNMENT SECURITIES | | | SALES OF
U.S. GOVERNMENT SECURITIES | |
Small Cap Core | | $ | 285,842,195 | | | $ | 0 | | | $ | 358,693,578 | | | $ | 0 | |
| | | | |
International Small Cap | | | 542,301,294 | | | | 0 | | | | 663,563,028 | | | | 0 | |
| | | | |
International Strategic Equities | | | 6,528,679,878 | | | | 0 | | | | 7,128,365,296 | | | | 0 | |
The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation are as follows:
| | | | | | | | | | | | | | | | |
| | | | | | GROSS UNREALIZED | | | NET UNREALIZED
APPRECIATION
(DEPRECIATION) | |
| PORTFOLIO | | COST | | | APPRECIATION | | | (DEPRECIATION) | |
Small Cap Core | | $ | 548,404,497 | | | $ | 128,101,810 | | | $ | (50,721,608 | ) | | $ | 77,380,202 | |
| | | | |
International Small Cap | | | 1,003,881,851 | | | | 130,792,277 | | | | (100,932,638 | ) | | | 29,859,639 | |
| | | | |
International Strategic Equities | | | 6,514,655,830 | | | | 786,128,032 | | | | (311,101,329 | ) | | | 475,026,703 | |
| B. | | Derivative Financial Instruments |
Each Portfolio may use derivatives in an effort to earn income and enhance returns, to replace more traditional direct investments, to obtain exposure to otherwise inaccessible markets (collectively, “investment purposes”), or to hedge or adjust the risk profile of its portfolio.
The principal types of derivatives utilized by the Portfolios, as well as the methods in which they may be used are:
Each Portfolio may buy or sell futures for investment purposes or for the purpose of hedging its portfolio against adverse effects of potential movements in the market. The Portfolios bear the market risk that arises from changes in the value of these instruments and the imperfect correlation between movements in the price of the futures and movements in the price of the assets, reference rates or indices which they are designed to track. Among other things, the Portfolios may purchase or sell futures for foreign currencies or options thereon for non-hedging purposes as a means of making direct investment in foreign currencies, as described below under “Currency Transactions”.
At the time a Portfolio enters into futures, a Portfolio deposits and maintains as collateral an initial margin with the broker, as required by the exchange on which the transaction is effected. Such amount is shown as cash collateral due from broker on the statement of assets and liabilities. Pursuant to the contract, the Portfolios agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Portfolios as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. The credit/counterparty risk for exchange-traded futures is generally less than privately negotiated futures, since the clearinghouse, which is the issuer or counterparty to each exchange-traded future, has robust risk mitigation standards, including the requirement to provide initial and variation margin. When the contract is closed, the Portfolios record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed.
Use of long futures subjects the Portfolios to risk of loss in excess of the amounts shown on the statement of assets and liabilities, up to the notional value of the futures. Use of short futures subjects the Portfolios to unlimited risk of loss. Each Portfolio may enter into futures only on exchanges or boards of trade. The exchange or board of trade acts as the counterparty to each futures transactions; therefore, the Portfolios’ credit risk is subject to failure of the exchange or board of trade. Under some circumstances, futures exchanges may establish daily limits on the amount that the price of futures can vary from the previous day’s settlement price, which could effectively prevent liquidation of unfavorable positions.
During the year ended September 30, 2023, the Small Cap Core Portfolio held futures for hedging purposes.
| | • | | Forward Currency Exchange Contracts |
Each Portfolio may enter into forward currency exchange contracts on either a spot (i.e., cash) or forward basis. Spot contracts are entered into at the rate then prevailing in the currency-exchange market. Forward currency exchange contracts obligate the contracting parties to purchase or sell a specific currency at a specified future date at a specified price. The Portfolios will generally not enter into a forward currency exchange contract with a term greater than one year. The gain or loss arising from the difference between the original contract and the closing of such contract would be included in net realized gain or loss on foreign currency transactions. Fluctuations in the value of open forward currency exchange contracts are recorded for financial reporting purposes as unrealized appreciation and/or depreciation by the Portfolio. Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.
Forward currency exchange contracts used to protect the Portfolios from adverse currency movements involve the risk that the Adviser may not accurately predict currency movements. As a result, total return could be adversely affected. The Adviser may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps and other options. The Adviser may enter into foreign currency transactions for investment opportunities when it anticipates that a foreign currency will appreciate or depreciate in value.
Under certain circumstances, the Portfolios may commit a substantial portion or the entire value of the Portfolios to the consummation of these contracts. The Adviser will consider the effect that a substantial commitment of assets to forward currency exchange contracts would have on the investment program of the Portfolios and the flexibility of the Portfolios to purchase additional securities.
During the year ended September 30, 2023, the International Small Cap Portfolio and International Strategic Equities Portfolio held forward currency exchange contracts for hedging purposes.
A Portfolio typically enters into International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreement”) with its OTC derivative contract counterparties in order to, among other things, reduce its credit risk to OTC counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, a Portfolio typically may offset with the OTC counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default or termination. In the event of a default by an OTC counterparty, the return of collateral with market value in excess of a Portfolio’s net liability, held by the defaulting party, may be delayed or denied.
A Portfolio’s ISDA Master Agreements may contain provisions for early termination of OTC derivative transactions in the event the net assets of a Portfolio decline below specific levels (“net asset contingent features”). If these levels are triggered, a Portfolio’s OTC counterparty has the right to terminate such transaction and require the Portfolio to pay or receive a settlement amount in connection with the terminated transaction. If OTC derivatives were held at period end, please refer to netting arrangements by the OTC counterparty tables below for additional details.
Notes to Financial Statements (continued)
During the year ended September 30, 2023, the Portfolios had entered into the following derivatives:
| | | | | | | | | | | | |
| SMALL CAP CORE PORTFOLIO | | ASSET DERIVATIVES | | | LIABILITY DERIVATIVES | |
| DERIVATIVE TYPE | | STATEMENTOF ASSETS
AND LIABILITIES
LOCATION | | FAIR VALUE | | | STATEMENTOF ASSETS
AND LIABILITIES LOCATION | | FAIR VALUE | |
| | | | |
Equity contracts | | | | | | | | Payable for variation margin on futures | | $ | 740,208 | * |
| | | | |
Total | | | | | | | | | | $ | 740,208 | |
| | * | Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation (depreciation) on futures and centrally cleared swaps as reported in the schedule of investments. |
| | | | | | | | | | | | |
| DERIVATIVE TYPE | | LOCATIONOF GAINOR (LOSS)ON
DERIVATIVES WITHIN STATEMENT
OF OPERATIONS | | REALIZED GAIN
OR (LOSS)ON
DERIVATIVES | | | CHANGE IN UNREALIZED
APPRECIATIONOR
(DEPRECIATION) | |
| | | |
Equity contracts | | Net realized gain (loss) on futures; Net change in unrealized appreciation (depreciation) of futures | | $ | (816,878 | ) | | $ | 1,207,275 | |
| | | |
Total | | | | $ | (816,878 | ) | | $ | 1,207,275 | |
| | | | | | | | | | | | |
INTERNATIONAL SMALL
CAP PORTFOLIO | | ASSET DERIVATIVES | | | LIABILITY DERIVATIVES | |
| DERIVATIVE TYPE | | STATEMENTOF ASSETS
AND LIABILITIES
LOCATION | | FAIR VALUE | | | STATEMENTOF ASSETS
AND LIABILITIES LOCATION | | FAIR VALUE | |
| | | | |
Foreign currency contracts | | Unrealized appreciation on forward currency exchange contracts | | $ | 4,313,994 | | | Unrealized depreciation on forward currency exchange contracts | | $ | 2,815,299 | |
| | | | |
Total | | | | $ | 4,313,994 | | | | | $ | 2,815,299 | |
| | | | | | | | | | |
| DERIVATIVE TYPE | | LOCATIONOF GAINOR (LOSS)ON
DERIVATIVES WITHIN STATEMENT
OF OPERATIONS | | REALIZED GAIN
OR (LOSS)ON
DERIVATIVES | | | CHANGE IN UNREALIZED
APPRECIATIONOR
(DEPRECIATION) | |
| | | |
Foreign currency contracts | | Net realized gain (loss) on forward currency exchange contracts; Net change in unrealized appreciation (depreciation) of forward currency exchange contracts | | $ | (6,910,801 | ) | | $ | 2,267,680 | |
| | | |
Total | | | | $ | (6,910,801 | ) | | $ | 2,267,680 | |
| | | | | | | | | | | | |
INTERNATIONAL STRATEGIC
EQUITIES PORTFOLIO | | ASSET DERIVATIVES | | | LIABILITY DERIVATIVES | |
| DERIVATIVE TYPE | | STATEMENTOF ASSETS
AND LIABILITIES
LOCATION | | FAIR VALUE | | | STATEMENTOF ASSETS AND LIABILITIES LOCATION | | FAIR VALUE | |
| | | | |
Foreign currency contracts | | Unrealized appreciation on forward currency exchange contracts | | $ | 115,608,669 | | | Unrealized depreciation on forward currency exchange contracts | | $ | 28,758,935 | |
| | | | |
Total | | | | $ | 115,608,669 | | | | | $ | 28,758,935 | |
| | | | | | | | | | |
| DERIVATIVE TYPE | | LOCATIONOF GAINOR (LOSS)ON
DERIVATIVES WITHIN STATEMENT OF OPERATIONS | | REALIZED GAIN
OR (LOSS)ON
DERIVATIVES | | | CHANGE IN UNREALIZED
APPRECIATIONOR
(DEPRECIATION) | |
| | | |
Foreign currency contracts | | Net realized gain (loss) on forward currency exchange contracts; Net change in unrealized appreciation (depreciation) of forward currency exchange contracts | | $ | (90,810,609 | ) | | $ | 58,557,937 | |
| | | |
Total | | | | $ | (90,810,609 | ) | | $ | 58,557,937 | |
The following tables represent the average monthly volume of the Portfolios’ derivative transactions during the year ended September 30, 2023:
| | | | |
| SMALL CAP CORE PORTFOLIO | | | |
Futures: | | | | |
| |
Average notional amount of buy contracts | | $ | 16,197,450 | |
| | | | |
| INTERNATIONAL SMALL CAP PORTFOLIO | | | |
Forward Currency Exchange Contracts: | | | | |
| |
Average principal amount of buy contracts | | $ | 154,671,659 | |
| |
Average principal amount of sale contracts | | $ | 164,513,174 | |
| | | | |
| INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO | | | |
Forward Currency Exchange Contracts: | | | | |
| |
Average principal amount of buy contracts | | $ | 2,374,428,973 | |
| |
Average principal amount of sale contracts | | $ | 2,568,176,413 | |
For financial reporting purposes, the Portfolios do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the statement of assets and liabilities.
All OTC derivatives held at period end were subject to netting arrangements. The following tables present the Portfolios’ derivative assets and liabilities by OTC counterparty net of amounts available for offset under ISDA Master Agreements (“MA”) and net of the related collateral received/pledged by the Portfolios as of September 30, 2023. Exchange-traded derivatives and centrally cleared swaps are not subject to netting arrangements and as such are excluded from the tables.
| | | | | | | | | | | | | | | | | | | | |
| INTERNATIONAL SMALL CAP PORTFOLIO | |
| COUNTERPARTY | | DERIVATIVE ASSETS SUBJECT
TO A MA | | | DERIVATIVES
AVAILABLE FOR
OFFSET | | | CASH
COLLATERAL
RECEIVED* | | | SECURITY
COLLATERAL
RECEIVED* | | | NET AMOUNT OF
DERIVATIVE
ASSETS | |
| | | | | |
Bank of America, NA | | $ | 260,243 | | | $ | (260,243 | ) | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | |
Barclays Bank PLC | | | 17,149 | | | | (17,149 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Citibank, NA | | | 726,027 | | | | 0 | | | | (590,000 | ) | | | 0 | | | | 136,027 | |
| | | | | |
HSBC Bank USA | | | 64,147 | | | | (64,147 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Morgan Stanley Capital Services, Inc. | | | 3,246,428 | | | | (64,216 | ) | | | (258,000 | ) | | | 0 | | | | 2,924,212 | |
| | | | | |
Total | | $ | 4,313,994 | | | $ | (405,755 | ) | | $ | (848,000 | ) | | $ | 0 | | | $ | 3,060,239 | ^ |
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| COUNTERPARTY | | DERIVATIVE
LIABILITIES SUBJECT
TOA MA | | | DERIVATIVES
AVAILABLE FOR
OFFSET | | | CASH
COLLATERAL
PLEDGED* | | | SECURITY
COLLATERAL
PLEDGED* | | | NET AMOUNT OF
DERIVATIVE
LIABILITIES | |
| | | | | |
Australia and New Zealand Banking Group Ltd. | | $ | 2,376 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 2,376 | |
| | | | | |
Bank of America, NA | | | 307,587 | | | | (260,243 | ) | | | 0 | | | | 0 | | | | 47,344 | |
| | | | | |
Barclays Bank PLC | | | 286,313 | | | | (17,149 | ) | | | (254,000 | ) | | | 0 | | | | 15,164 | |
| | | | | |
BNP Paribas SA | | | 23,469 | | | | 0 | | | | 0 | | | | 0 | | | | 23,469 | |
| | | | | |
Deutsche Bank AG | | | 404,315 | | | | 0 | | | | 0 | | | | 0 | | | | 404,315 | |
| | | | | |
Goldman Sachs Bank USA | | | 349,351 | | | | 0 | | | | 0 | | | | 0 | | | | 349,351 | |
| | | | | |
HSBC Bank USA | | | 1,223,443 | | | | (64,147 | ) | | | (1,159,296 | ) | | | 0 | | | | 0 | |
| | | | | |
JPMorgan Chase Bank, NA | | | 121,590 | | | | 0 | | | | 0 | | | | 0 | | | | 121,590 | |
| | | | | |
Morgan Stanley Capital Services, Inc. | | | 64,216 | | | | (64,216 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
State Street Bank & Trust Co. | | | 32,639 | | | | 0 | | | | 0 | | | | 0 | | | | 32,639 | |
| | | | | |
Total | | $ | 2,815,299 | | | $ | (405,755 | ) | | $ | (1,413,296 | ) | | $ | 0 | | | $ | 996,248 | ^ |
| | * | The actual collateral received/pledged may be more than the amount reported due to over-collateralization. |
| | ^ | Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty. |
| | | | | | | | | | | | | | | | | | | | |
| INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO | |
| COUNTERPARTY | | DERIVATIVE
ASSETS SUBJECT
TOA MA | | | DERIVATIVES
AVAILABLE FOR
OFFSET | | | CASH
COLLATERAL
RECEIVED* | | | SECURITY
COLLATERAL
RECEIVED* | | | NET AMOUNT OF
DERIVATIVE
ASSETS | |
| | | | | |
Bank of America, NA | | $ | 2,870,129 | | | $ | (1,505,090 | ) | | $ | (1,365,039 | ) | | $ | 0 | | | $ | 0 | |
| | | | | |
Barclays Bank PLC | | | 22,705,328 | | | | (2,898,718 | ) | | | 0 | | | | 0 | | | | 19,806,610 | |
| | | | | |
BNP Paribas SA | | | 2,857,342 | | | | (1,491,188 | ) | | | 0 | | | | 0 | | | | 1,366,154 | |
| | | | | |
Citibank, NA | | | 1,839,782 | | | | (1,839,782 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Goldman Sachs Bank USA | | | 290,864 | | | | (290,864 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
HSBC Bank USA | | | 52,461,449 | | | | (2,674,524 | ) | | | (13,445,000 | ) | | | 0 | | | | 36,341,925 | |
| | | | | |
JPMorgan Chase Bank, NA | | | 522,991 | | | | (522,991 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Morgan Stanley Capital Services, Inc. | | | 971,261 | | | | (971,261 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Natwest Markets PLC | | | 2,359,308 | | | | (5,873 | ) | | | 0 | | | | 0 | | | | 2,353,435 | |
| | | | | |
Standard Chartered Bank | | | 146,542 | | | | (146,542 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
UBS AG | | | 28,583,673 | | | | (271,273 | ) | | | 0 | | | | 0 | | | | 28,312,400 | |
| | | | | |
Total | | $ | 115,608,669 | | | $ | (12,618,106 | ) | | $ | (14,810,039 | ) | | $ | 0 | | | $ | 88,180,524 | ^ |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| COUNTERPARTY | | DERIVATIVE
LIABILITIES SUBJECT
TOA MA | | | DERIVATIVES
AVAILABLE FOR
OFFSET | | | CASH
COLLATERAL
PLEDGED* | | | SECURITY
COLLATERAL
PLEDGED* | | | NET AMOUNT OF
DERIVATIVE
LIABILITIES | |
| | | | | |
Bank of America, NA | | $ | 1,505,090 | | | $ | (1,505,090 | ) | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | |
Barclays Bank PLC | | | 2,898,718 | | | | (2,898,718 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
BNP Paribas SA | | | 1,491,188 | | | | (1,491,188 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Citibank, NA | | | 2,571,847 | | | | (1,839,782 | ) | | | 0 | | | | 0 | | | | 732,065 | |
| | | | | |
Deutsche Bank AG | | | 920,957 | | | | 0 | | | | 0 | | | | 0 | | | | 920,957 | |
| | | | | |
Goldman Sachs Bank USA | | | 3,808,706 | | | | (290,864 | ) | | | 0 | | | | 0 | | | | 3,517,842 | |
| | | | | |
HSBC Bank USA | | | 2,674,524 | | | | (2,674,524 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
JPMorgan Chase Bank, NA | | | 10,194,402 | | | | (522,991 | ) | | | 0 | | | | 0 | | | | 9,671,411 | |
| | | | | |
Morgan Stanley Capital Services, Inc. | | | 1,907,473 | | | | (971,261 | ) | | | (936,212 | ) | | | 0 | | | | 0 | |
| | | | | |
Natwest Markets PLC | | | 5,873 | | | | (5,873 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Standard Chartered Bank | | | 486,897 | | | | (146,542 | ) | | | 0 | | | | 0 | | | | 340,355 | |
| | | | | |
State Street Bank & Trust Co. | | | 21,987 | | | | 0 | | | | 0 | | | | 0 | | | | 21,987 | |
| | | | | |
UBS AG | | | 271,273 | | | | (271,273 | ) | | | 0 | | | | 0 | | | | 0 | |
| | | | | |
Total | | $ | 28,758,935 | | | $ | (12,618,106 | ) | | $ | (936,212 | ) | | $ | 0 | | | $ | 15,204,617 | ^ |
| | * | The actual collateral received/pledged may be more than the amount reported due to over-collateralization. |
| | ^ | Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty. |
The Portfolios may invest in non-U.S. Dollar-denominated securities on a currency hedged or unhedged basis. The Portfolios may seek investment opportunities by taking long or short positions in currencies through the use of currency-related derivatives, including forward currency exchange contracts, futures and options on futures, swaps, and other options. The Portfolios may enter into transactions for investment opportunities when it anticipates that a foreign currency will appreciate or depreciate in value but securities denominated in that currency are not held by the Portfolios and do not present attractive investment opportunities. Such transactions may also be used when the Adviser believes that it may be more efficient than a direct investment in a foreign currency-denominated security. The Portfolios may also conduct currency exchange contracts on a spot basis (i.e., for cash at the spot rate prevailing in the currency exchange market for buying or selling currencies).
| NOTE 4. | Distributions to Shareholders |
The tax character of distributions paid during the fiscal years ended September 30, 2023 and September 30, 2022 were as follows:
| | | | | | | | |
| PORTFOLIO | | 2023 | | | 2022 | |
Small Cap Core | | | | | | | | |
| | |
Distributions paid from: | | | | | | | | |
| | |
Ordinary income | | $ | 3,283,811 | | | $ | 1,025,873 | |
| | |
Long-term capital gains | | | 48,515,330 | | | | 50,364,472 | |
| | | | | | | | |
| | |
Total distributions paid | | $ | 51,799,141 | | | $ | 51,390,345 | |
| | | | | | | | |
Notes to Financial Statements (continued)
| | | | | | | | |
| PORTFOLIO | | 2023 | | | 2022 | |
International Small Cap | | | | | | | | |
| | |
Distributions paid from: | | | | | | | | |
| | |
Ordinary income | | $ | 11,869,244 | | | $ | 30,557,817 | |
| | |
Long-term capital gains | | | 0 | | | | 26,557,551 | |
| | | | | | | | |
| | |
Total distributions paid | | $ | 11,869,244 | | | $ | 57,115,368 | |
| | | | | | | | |
| | | | | | | | |
International Strategic Equities | | | | | | | | |
| | |
Distributions paid from: | | | | | | | | |
| | |
Ordinary income | | $ | 284,518,492 | | | $ | 243,649,242 | |
| | |
Long-term capital gains | | | 0 | | | | 287,268,751 | |
| | | | | | | | |
| | |
Total distributions paid | | $ | 284,518,492 | | | $ | 530,917,993 | |
| | | | | | | | |
As of September 30, 2023, the components of accumulated earnings (deficit) on a tax basis were as follows:
| | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO | | UNDISTRIBUTED
ORDINARY
INCOME | | | UNDISTRIBUTED
LONG-TERM
GAINS | | | ACCUMULATED
CAPITAL AND
OTHER
LOSSES(a) | | | UNREALIZED
APPRECIATION
(DEPRECIATION)(b) | | | TOTAL
ACCUMULATED
EARNINGS
(DEFICIT) | |
Small Cap Core | | $ | 3,686,149 | | | $ | 51,412,947 | | | $ | 0 | | | $ | 77,380,202 | | | $ | 132,479,298 | |
| | | | | |
International Small Cap | | | 30,409,686 | | | | 0 | | | | (65,079,901 | ) | | | 27,941,960 | | | | (6,728,255 | ) |
| | | | | |
International Strategic Equities | | | 177,745,061 | | | | 0 | | | | (896,966,744 | ) | | | 473,979,953 | | | | (245,241,730 | ) |
| | (a) | As of September 30, 2023 certain Portfolios had capital loss carryforwards for federal income tax purposes. |
| | (b) | The differences between book-basis and tax-basis unrealized appreciation (depreciation) are attributable primarily to the tax deferral of losses on wash sales, the tax treatment of passive foreign investment companies (PFICs), and the realization for tax purposes of gains/losses on certain derivative instruments. |
Under current tax rules, regulated investment companies can elect to treat certain late-year ordinary losses incurred and post-October capital losses (capital losses realized after October 31) as arising on the first day of the following taxable year.
For tax purposes, net capital losses may be carried over to offset future capital gains, if any. Portfolios are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses.
As of September 30, 2023, the following Portfolios had net capital loss carryforwards as follows:
| | | | | | | | |
| PORTFOLIO | | SHORT-TERM
AMOUNT | | | LONG-TERM
AMOUNT | |
Small Cap Core | | $ | 0 | | | $ | 0 | |
| | |
International Small Cap | | | 52,304,546 | | | | 12,775,355 | |
| | |
International Strategic Equities | | | 896,966,744 | | | | 0 | |
| NOTE 5. | Risks Involved in Investing in the Portfolios |
Foreign (Non-U.S.) Securities Risk—Investments in foreign securities entail significant risks in addition to those customarily associated with investing in U.S. securities, such as less liquid, less transparent, less regulated and more volatile markets. These risks include risks related to unfavorable or unsuccessful government actions, reduction of government or central bank support, economic sanctions and potential responses to those sanctions, inadequate accounting standards and auditing and financial recordkeeping requirements, lack of information, social instability, armed conflict, and other adverse market, economic, political and regulatory factors, all of which could disrupt the financial markets in which the Portfolios invest and adversely affect the value of the Portfolios’ assets.
Country Concentration Risk—The Portfolios may not always be diversified among countries or regions and the effect on the share price of the Portfolios of specific risks such as political, regulatory and currency may be magnified due to concentration of the Portfolios’ investments in a particular country or region.
Sector Risk—The Portfolios may have more risk because of concentrated investments in a particular market sector, such as the financials, consumer discretionary, information technology or industrials sector. Market or economic factors affecting that sector could have a major effect on the value of the Portfolios’ investments.
Emerging-Markets Securities Risk—The risks of investing in foreign (non-U.S.) securities are heightened with respect to issuers in emerging-market countries because the markets are less developed and less liquid and there may be a greater amount of economic, political and social uncertainty, and these risks are even more pronounced in “frontier” markets, which are investable markets with lower total market capitalization and liquidity than the more developed emerging markets. Emerging markets typically have fewer medical and economic resources than more developed countries, and thus they may be less able to control or mitigate the effects of a pandemic, climate change, or a natural disaster. In addition, the value of the Portfolios’ investments may decline because of factors such as unfavorable or unsuccessful government actions and reduction of government or central bank support.
Foreign Currency Risk—This is the risk that changes in foreign (non-U.S.) currency exchange rates may negatively affect the value of the Portfolios’ investments or reduce the returns of the Portfolios. For example, the value of the Portfolios’ investments in foreign securities and foreign currency positions may decrease if the U.S. Dollar is strong (i.e., gaining value relative to other currencies) and other currencies are weak (i.e., losing value relative to the U.S. Dollar). The value of the U.S. Dollar has recently appreciated in value against most foreign currencies, which may negatively affect the value of the Portfolios’ foreign investments when converted to U.S. Dollars.
Actions by a Few Major Investors—In certain countries, volatility may be heightened by actions of a few major investors. For example, substantial increases or decreases in cash flows of mutual funds investing in these markets could significantly affect local stock prices and, therefore, share prices of the Portfolios.
Illiquid Investments Risk—Illiquid investments risk exists when particular investments are difficult or impossible to purchase or sell, possibly preventing the Portfolios from purchasing or selling these securities at an advantageous price. In certain cases, governmental actions could prevent sales of securities or repatriation of proceeds. Illiquid securities may also be difficult to value. If the Portfolios are forced to sell an illiquid asset to meet redemption requests or other cash needs, or to try to limit losses, the Portfolios may be forced to sell at a substantial loss or may not be able to sell at all.
Redemption Risk—The Portfolios may experience heavy redemptions that could cause the Portfolios to liquidate their assets at inopportune times or unfavorable prices or increase or accelerate taxable gains or transaction costs and may negatively affect the Portfolios’ net asset value, or performance, which could cause the value of your investment to decline. Redemption risk is heightened during periods of overall market turmoil.
Market Risk—The Portfolios are subject to market risk, which is the risk that stock prices in general or in particular countries or sectors may decline over short or extended periods. Stock prices may decline in response to adverse changes in the economy or the economic outlook; deterioration in investor sentiment; interest-rate, currency and commodity price fluctuations; adverse geopolitical, social or environmental developments; issuer- and sector- specific considerations; public health crises (including the occurrence of a contagious disease or illness) and regional and global conflicts; cybersecurity events; market disruptions caused by tariffs; trade disputes; measures to address budget deficits; downgrading of sovereign debt; sanctions or other government actions; and other factors.
Economies and financial markets throughout the world are becoming increasingly interconnected. Economic, financial or political events, trading and tariff arrangements, armed conflict, including Russia’s military invasion of Ukraine, terrorism, natural disasters (including the spread of infectious illness) and other circumstances in one country or region could have profound impacts on global economies or markets. Following Russia’s recent invasion of Ukraine, the United States, the European Union and the regulatory bodies of certain other countries instituted numerous sanctions against certain Russian individuals and Russian entities. These sanctions, and other intergovernmental actions that may be undertaken against Russia in the future, may result in the devaluation of Russian currency, a downgrade in the country’s credit rating, and a decline in the value and liquidity of Russian stocks. These sanctions could result in the immediate freeze of Russian securities, including securities in the form of ADRs, impairing the ability of the Portfolios to buy, sell,
Notes to Financial Statements (continued)
receive or deliver those securities. Retaliatory action by the Russian government could involve the seizure of U.S. and/or European residents’ assets and any such actions are likely to impair the value and liquidity of such assets. The continued disruption of the Russian economy has had severe adverse effects on the region and beyond, including significant negative impacts on the markets for certain securities and commodities, such as oil and natural gas, as well as other sectors. As a result, whether or not the Portfolios invest in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the Portfolio’s investments may be negatively affected.
Capitalization Risk—Investments in small- and mid-capitalization companies may be more volatile than investments in large-capitalization companies. Investments in small- and mid-capitalization companies may have additional risks because these companies may have limited product lines, markets or financial resources. The prices of securities of small-mid-capitalization companies generally are more volatile than those of large- capitalization companies and are more likely to be adversely affected than large- capitalization companies by changes in earnings results and investor expectations or poor economic or market conditions, including those experienced during a recession. Securities of small and mid-capitalization companies may underperform large capitalization companies, may be harder to sell at times or at prices the portfolio managers believe appropriate and may have greater potential for losses.
Allocation Risk—The Portfolios may seek to focus on different investment disciplines or factors at different times as a means to achieve their investment objectives. In the event that the investment disciplines or factors to which the Portfolios have greater exposure perform worse than the investment disciplines or factors with less exposure, the Portfolios’ returns may be negatively affected.
Derivatives Risk—The Portfolios may use derivatives in currency hedging as well as for direct investments to gain access to certain markets, earn income, enhance return and broaden portfolio diversification, which entail greater risk than if used solely for hedging purposes. While hedging can guard against potential risks, there is also a risk that a derivative intended as a hedge may not perform as expected. In addition to other risks such as the credit risk of the counterparty, derivatives involve the risk that changes in the value of the derivative may not correlate with relevant assets, rates or indices. Derivatives may be difficult to price or unwind, and small changes may produce disproportionate losses for the Portfolios. A short position in a derivative instrument involves the risk of a theoretically unlimited increase in the value of the underlying instrument, which could cause the Portfolios to suffer a (potentially unlimited) loss. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. Assets required to be set aside or posted as margin or collateral for derivatives positions may themselves go down in value, and these collateral and other requirements may limit investment flexibility. Some derivatives involve leverage, which can make the Portfolios more volatile and can compound other risks. Derivatives, especially over-the-counter derivatives, are also subject to counterparty risk, which is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable or unwilling to honor its contractual obligations to the Portfolios. The U.S. government and certain foreign governments have adopted regulations governing derivatives markets, including mandatory clearing of certain derivatives as well as additional regulations governing margin, reporting and registration requirements. The ultimate impact of the regulations remains unclear. Additional regulation may make derivatives more costly, limit their availability or utility, otherwise adversely affect their performance, or disrupt markets.
Management Risk—The Portfolios are subject to management risk because they are actively managed investment portfolios. The Adviser will apply its investment techniques and risk analyses in making investment decisions for the Portfolios, but these techniques, analyses and decisions may not work as intended or may not produce the desired results, and may, during certain periods, result in increased volatility for the Portfolios or cause the value of the Portfolios’ shares to go down. In some cases, derivatives and other investment techniques may be unavailable, or the Adviser may determine not to use them, possibly even under market conditions where their use could benefit the Portfolios. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise perform as expected. In addition, the Adviser may change the Portfolios’ investment strategies or policies from time to time. Those changes may not lead to the results intended by the Adviser and could have an adverse effect on the Adviser and could also have an adverse effect on the value or performance of the Portfolios.
Real Estate Related Securities Risk—Investing in real estate related securities includes, among others, the following risks: possible declines in the value of real estate; risks related to general and local economic conditions, including increases in
the rate of inflation; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition, property taxes and operating expenses; changes in zoning laws; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; uninsured damages from floods, earthquakes or other natural disasters; limitations on and variations in rents; and changes in interest rates. In addition, global climate change may have an adverse effect on property and security values and may exacerbate the risks of natural disasters. The COVID-19 pandemic has also impacted certain real estate sectors by accelerating the trend towards online shopping and remote-working environments. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, are not diversified, and are subject to heavy cash flow dependency, default by borrowers and self-liquidation. Investing in REITs also involves risks similar to those associated with investing in small-capitalization companies. REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. REIT issuers may also fail to maintain their exemptions from investment company registration or fail to qualify for the “dividends paid deduction” under the Internal Revenue Code of 1986, as amended.
Investment in Other Investment Companies Risk—As with other investments, investments in other investment companies, including other registered funds advised by the Adviser and ETFs, are subject to market and management risk. The market value of the shares of other investment companies and ETFs may differ from their net asset value. In addition, if the Portfolios acquire shares of investment companies, shareholders bear both their proportionate share of expenses in the Portfolios (including management and advisory fees) and, indirectly, the expenses of the investment companies in which the Portfolios invest.
LIBOR Replacement Risk—The Fund may be exposed to debt securities, derivatives or other financial instruments that recently transitioned from the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations. LIBOR’s administrator, ICE Benchmark Administration, ceased publishing most LIBOR settings (including some U.S. LIBOR settings) by the end of 2021 and the remaining (and most widely used) U.S. Dollar LIBOR settings after June 30, 2023. The United Kingdom Financial Conduct Authority, which regulates LIBOR, will permit the use of synthetic U.S. Dollar LIBOR rates for non-U.S. contracts through September 30, 2024, but any such rates would be considered non-representative of the underlying market. Since 2018 the Federal Reserve Bank of New York has published the Secured Overnight Financing Rate (referred to as SOFR), which is intended to replace U.S. Dollar LIBOR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement (repo) market. There is no assurance that the composition or characteristics of SOFR or any such alternative reference rate will be similar to or produce the same value or economic equivalence as LIBOR or that the market for SOFR-linked financial instruments will have the same volume or liquidity as did the market for LIBOR-linked financial instruments prior to LIBOR’s discontinuance or unavailability. Neither the long-term effects of the LIBOR transition process nor its ultimate success can yet be known.
Cybersecurity Risk—As the use of the internet and other technologies has become more prevalent in the course of business, the Portfolios have become more susceptible to operational and financial risks associated with cybersecurity. Cybersecurity incidents can result from deliberate attacks such as gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption, or from unintentional events, such as the inadvertent release of confidential information. Cybersecurity failures or breaches of the Portfolios or their service providers or the issuers of securities in which the Portfolios invest have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, the inability of Portfolio shareholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs. While measures have been developed which are designed to reduce the risks associated with cybersecurity, there is no guarantee that those measures will be effective, particularly since the Portfolios do not control the cybersecurity defenses or plans of their service providers, financial intermediaries and companies in which they invest or with which they do business.
Cybersecurity incidents, both intentional and unintentional, may allow an unauthorized party to gain access to Portfolio or shareholder assets, Portfolio or customer data (including private shareholder information), or proprietary information, or cause a Portfolio, the Adviser, and/or the Portfolios’ service providers (including, but not limited to, fund accountants,
Notes to Financial Statements (continued)
custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or lose operational functionality, or prevent Portfolio investors from purchasing, redeeming or exchanging shares or receiving distributions. A Portfolio and the Adviser have limited ability to prevent or mitigate cybersecurity incidents affecting third-party service providers. Cybersecurity incidents may result in financial losses to such Portfolio and its shareholders, and substantial costs may be incurred in order to prevent any future cybersecurity incidents.
Indemnification Risk—In the ordinary course of business, the Portfolios enter into contracts that contain a variety of indemnifications. The Portfolios’ maximum exposure under these arrangements is unknown. However, the Portfolios have not had prior claims or losses pursuant to these indemnification provisions and expect the risk of loss thereunder to be remote. Therefore, the Portfolios have not accrued any liability in connection with these indemnification provisions.
| NOTE 6. | Capital-Share Transactions |
The Fund has authorized 27 billion shares of common stock, par value $0.0001 per share. Each SCB Class, Advisor Class and Class Z of the Portfolios is allocated 1 billion shares. The balance of the authorized shares has been allocated to share classes that are currently not offered.
Share transactions for each Portfolio for the years ended September 30, 2023 and September 30, 2022, were as follows:
| | | | | | | | | | | | | | | | | | | | |
| |
| | | SMALL CAP CORE PORTFOLIO | |
| | | | | | | | | | | | | | | | | | | | |
| | | |
| | | SHARES | | | | | | AMOUNT | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | | | | YEAR
ENDED
9/30/23 | | | YEAR ENDED
9/30/22 | |
SCB Class Shares | |
| | | | | |
Shares sold | | | 12,604 | | | | 13,143 | | | | | | | $ | 150,293 | | | $ | 193,157 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 37,241 | | | | 23,104 | | | | | | | | 435,727 | | | | 350,482 | |
| | | | | |
Shares redeemed | | | (90,094 | ) | | | (62,871 | ) | | | | | | | (1,107,477 | ) | | | (858,857 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net decrease | | | (40,249 | ) | | | (26,624 | ) | | | | | | $ | (521,457 | ) | | $ | (315,218 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Advisor Class Shares | |
| | | | | |
Shares sold | | | 4,413,420 | | | | 2,450,082 | | | | | | | $ | 53,305,142 | | | $ | 33,739,686 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 3,109,329 | | | | 1,859,599 | | | | | | | | 36,472,428 | | | | 28,321,701 | |
| | | | | |
Shares redeemed | | | (5,716,608 | ) | | | (6,348,125 | ) | | | | | | | (69,627,489 | ) | | | (85,599,146 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net increase (decrease) | | | 1,806,141 | | | | (2,038,444 | ) | | | | | | $ | 20,150,081 | | | $ | (23,537,759 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Class Z Shares | |
| | | | | |
Shares sold | | | 116,497 | | | | 0 | | | | | | | $ | 1,377,000 | | | $ | 0 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 811,079 | | | | 640,513 | | | | | | | | 9,505,845 | | | | 9,748,601 | |
| | | | | |
Shares redeemed | | | (3,501,777 | ) | | | (1,601,805 | ) | | | | | | | (41,456,291 | ) | | | (22,380,146 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net decrease | | | (2,574,201 | ) | | | (961,292 | ) | | | | | | $ | (30,573,446 | ) | | $ | (12,631,545 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL SMALL CAP PORTFOLIO | |
| | | | | | | | | | | | | | | | | | | | |
| | | |
| | | SHARES | | | | | | AMOUNT | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | | | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | |
SCB Class Shares | |
| | | | | |
Shares sold | | | 274,814 | | | | 248,402 | | | | | | | $ | 2,873,948 | | | $ | 2,850,191 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 29,013 | | | | 169,965 | | | | | | | | 294,487 | | | | 2,190,852 | |
| | | | | |
Shares redeemed | | | (538,205 | ) | | | (382,350 | ) | | | | | | | (5,682,229 | ) | | | (4,528,837 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net increase (decrease) | | | (234,378 | ) | | | 36,017 | | | | | | | $ | (2,513,794 | ) | | $ | 512,206 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Advisor Class Shares | |
| | | | | |
Shares sold | | | 10,853,794 | | | | 8,249,348 | | | | | | | $ | 115,354,061 | | | $ | 96,638,908 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 591,756 | | | | 2,422,656 | | | | | | | | 6,006,321 | | | | 31,252,262 | |
| | | | | |
Shares redeemed | | | (11,106,167 | ) | | | (8,003,644 | ) | | | | | | | (116,447,213 | ) | | | (90,003,101 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net increase | | | 339,383 | | | | 2,668,360 | | | | | | | $ | 4,913,169 | | | $ | 37,888,069 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Class Z Shares | |
| | | | | |
Shares sold | | | 82,797 | | | | 0 | | | | | | | $ | 900,000 | | | $ | 0 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 359,872 | | | | 1,461,979 | | | | | | | | 3,652,700 | | | | 18,859,533 | |
| | | | | |
Shares redeemed | | | (14,740,924 | ) | | | (5,237,233 | ) | | | | | | | (160,120,106 | ) | | | (62,573,036 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net decrease | | | (14,298,255 | ) | | | (3,775,254 | ) | | | | | | $ | (155,567,406 | ) | | $ | (43,713,503 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO | |
| | | | | | | | | | | | | | | | | | | | |
| | | |
| | | SHARES | | | | | | AMOUNT | |
| | | | | | | | | | | | | | | | | | | | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | | | | YEAR ENDED
9/30/23 | | | YEAR ENDED
9/30/22 | |
SCB Class Shares | |
| | | | | |
Shares sold | | | 4,021,047 | | | | 1,720,671 | | | | | | | $ | 44,546,301 | | | $ | 20,925,628 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 849,321 | | | | 1,624,656 | | | | | | | | 8,960,335 | | | | 21,412,972 | |
| | | | | |
Shares redeemed | | | (4,915,105 | ) | | | (3,153,455 | ) | | | | | | | (52,889,990 | ) | | | (38,941,876 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net increase (decrease) | | | (44,737 | ) | | | 191,872 | | | | | | | $ | 616,646 | | | $ | 3,396,724 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Notes to Financial Statements (continued)
| | | | | | | | | | | | | | | | | | | | |
| |
| | | INTERNATIONAL STRATEGIC EQUITIES PORTFOLIO | |
| | | | | | | | | | | | | | | | | | | | |
| | | |
| | | SHARES | | | | | | AMOUNT | |
| | | YEAR
ENDED
9/30/23 | | | YEAR
ENDED
9/30/22 | | | | | | YEAR ENDED
9/30/23 | | | YEAR ENDED
9/30/22 | |
Advisor Class Shares | |
| | | | | |
Shares sold | | | 78,940,722 | | | | 54,297,935 | | | | | | | $ | 872,954,387 | | | $ | 671,081,324 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 15,155,312 | | | | 26,045,963 | | | | | | | | 159,888,547 | | | | 343,806,709 | |
| | | | | |
Shares redeemed | | | (88,834,612 | ) | | | (48,417,009 | ) | | | | | | | (955,059,994 | ) | | | (581,680,341 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net increase | | | 5,261,422 | | | | 31,926,889 | | | | | | | $ | 77,782,940 | | | $ | 433,207,692 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Class Z Shares | |
| | | | | |
Shares sold | | | 1,462,052 | | | | 1,807,260 | | | | | | | $ | 16,547,633 | | | $ | 20,361,000 | |
| | | | | |
Shares issued to shareholders on reinvestment of dividends and distributions | | | 5,671,482 | | | | 9,124,070 | | | | | | | | 59,947,564 | | | | 120,620,206 | |
| | | | | |
Shares redeemed | | | (50,753,206 | ) | | | (24,945,635 | ) | | | | | | | (576,986,550 | ) | | | (307,178,499 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net decrease | | | (43,619,672 | ) | | | (14,014,305 | ) | | | | | | $ | (500,491,353 | ) | | $ | (166,197,293 | ) |
| | | | | | | | | | | | | | | | | | | | |
At September 30, 2023, certain AllianceBerstein mutual funds owned 14%, 20% and 15% Small Cap Core Portfolio, of International Small Cap Portfolio and International Strategic Equities Portfolio, respectively, in aggregate of the Portfolios’ outstanding shares. Significant transactions by such shareholders, if any, may impact the Portfolios’ performance.
| NOTE 7. | Recent Accounting Pronouncements |
In December 2022, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2022-06, “Reference Rate Reform (Topic 848)—Deferral of the Sunset Date of Topic 848”. ASU 2022-06 is an amendment to ASU 2020-04, which provided optional guidance to ease the potential accounting burden due to the discontinuation of the LIBOR and other interbank-offered based reference rates and which was effective as of March 12, 2020 through December 31, 2022. ASU 2022-06 extends the effective period through December 31, 2024. Management is currently evaluating the impact, if any, of applying ASU 2022-06.
At a meeting held on October 25-26, 2023, the Board approved a voluntary advisory fee waiver for the International Strategic Equities Portfolio of 0.025% of the Portfolio’s average daily net assets. The fee waiver was effective as of November 1, 2023 and will expire on October 31, 2024.
Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no other material events that would require disclosure in the Portfolios’ financial statements through this date.
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Bernstein Fund, Inc. and Shareholders of Small Cap Core Portfolio, International Small Cap Portfolio and International Strategic Equities Portfolio
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Small Cap Core Portfolio, International Small Cap Portfolio and International Strategic Equities Portfolio (constituting Bernstein Fund, Inc., hereafter collectively referred to as the “Portfolios”) as of September 30, 2023, the related statements of operations for the year ended September 30, 2023, the statements of changes in net assets for each of the two years in the period ended September 30, 2023, including the related notes, and the financial highlights for each of the five years in the period ended September 30, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Portfolios as of September 30, 2023, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended September 30, 2023 and each of the financial highlights for each of the five years in the period ended September 30, 2023 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Portfolios’ management. Our responsibility is to express an opinion on the Portfolios’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Portfolios in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of September 30, 2023 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
New York, New York
November 22, 2023
We have served as the auditor of one or more investment companies in the AB Group of Mutual Funds since at least 1985. We have not been able to determine the specific year we began serving as auditor.
2023 Federal Tax Information (Unaudited)
For Federal income tax purposes, the following information is furnished with respect to the distributions paid by each applicable Portfolio during the taxable year ended September 30, 2023. For corporate shareholders, the following percentages of dividends paid by each Portfolio qualify for the dividends received deduction.
| | | | | | | | |
| PORTFOLIO | | DIVIDENDS RECEIVED DEDUCTION %
(CORPORATE SHAREHOLDERS) | | | | |
| | |
Small Cap Core | | | 100 | % | | | | |
For the taxable year ended September 30, 2023, each Portfolio designates the following amounts as the maximum amount that may be considered qualified dividend income for individual shareholders.
| | | | | | | | |
| PORTFOLIO | | QUALIFIED DIVIDEND INCOME | | | | |
Small Cap Core | | $ | 3,283,811 | | | | | |
| | |
International Small Cap | | | 14,791,633 | | | | | |
| | |
International Strategic Equities | | | 265,390,476 | | | | | |
Certain Portfolios intend to make an election to pass through foreign taxes paid by the Portfolios to their shareholders. For the taxable year ended September 30, 2023, the maximum amounts of foreign taxes that may be passed through and the foreign source income for information reporting purposes is as follows:
| | | | | | | | |
| PORTFOLIO | | FOREIGN TAXES TO PASS THROUGH | | | FOREIGN SOURCE
INCOME | |
International Small Cap | | $ | 4,207,518 | | | $ | 43,823,643 | |
| | |
International Strategic Equities | | | 25,892,194 | | | | 248,293,484 | |
For the taxable year ended September 30, 2023, the long-term capital gain distribution is as follows:
| | | | | | | | |
| PORTFOLIO | | LONG-TERM CAPITAL
GAIN DISTRIBUTIONS | | | | |
Small Cap Core | | $ | 48,515,330 | | | | | |
| | |
International Small Cap | | | 0 | | | | | |
| | |
International Strategic Equities | | | 0 | | | | | |
Shareholders should not use the above information to prepare their income tax returns. The information necessary to complete your income tax returns will be included with your Form 1099-DIV which will be sent to you separately in January 2024.
Bernstein Fund, Inc.
BOARDOF DIRECTORS
R. Jay Gerken(1)
Chair
Debra Perry(1)
Director
Jeffrey R. Holland(1)
Director
William Kristol(1)
Director
Donald K. Peterson(1)
Director
OFFICERS
Alexander Chaloff,
President
Andrew Birse(2),
Vice President
Peter Chocian(2),
Vice President
Vivian Chen(2),
Vice President
Samantha S. Lau(2),
Vice President
Stuart Rae(2),
Vice President
Erik A. Turenchalk(2),
Vice President
Nelson Yu(2),
Vice President
Nancy E. Hay,
Secretary
Michael B. Reyes,
Senior Vice President
Stephen M. Woetzel,
Treasurer and Chief Financial Officer
Phyllis J. Clarke,
Controller
Jennifer Friedland,
Chief Compliance Officer
CUSTODIANAND ACCOUNTING AGENT
State Street Bank and Trust Company
One Congress Street, Suite 1
Boston, MA 02114
DISTRIBUTORS(3)
Sanford C. Bernstein & Co., LLC
1345 Avenue of the Americas
New York, NY 10105
AllianceBernstein Investments, Inc.
501 Commerce Street
Nashville, TN 37203
TRANSFER AGENT
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278
Toll-Free (800) 221-5672
INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
LEGAL COUNSEL
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
| (1) | | Member of the Audit Committee, the Governance, Nominating and Compensation Committee, and the Independent Directors Committee. |
| (2) | | The day-to-day management of, and investment decisions for, the Portfolios are made by the senior management teams. Mr. Rae and Ms. Chen are the investment professional with the most significant responsibility for the day-to-day management of the International Strategic Equities Portfolio. Messrs. Birse, Chocian and Yu are the investment professionals with the most significant responsibility for the day-to-day management of the International Small Cap Portfolio. Ms. Lau and Mr. Turenchalk are the investment professionals with the most significant responsibility for the day-to-day management of the Small Cap Core Portfolio. |
| (3) | | Sanford C. Bernstein & Co., LLC acts as distributor of SCB Class shares of each Portfolio. AllianceBernstein Investments, Inc. acts as the principal underwriter and distributor of the Portfolios’ Advisor Class and Class Z shares. Advisor Class shares and Class Z shares are not subject to the Rule 12b-1 asset-based sales charges. |
Bernstein Fund, Inc. (continued)
| | | | | | | | |
| | |
DIRECTORS’ INFORMATION | | | |
Name, Address+, Age,
(Year of Election*) | | Principal Occupation(s)
During Past Five (5) Years and Other
Information | | Portfolios in
Fund Complex
Overseen
By Director | | | Other Directorships
Currently Held by Director |
DISINTERESTED DIRECTORS | | | | | | |
R. Jay Gerken,# Chair of the Board 72 (2013) | | Formerly, President and Chief Executive Officer of Legg Mason Partners Fund Advisor, LLC, and President & Board Member of The Legg Mason and Western Asset mutual funds from 2005 until June 2013. Previously, he was the President and Chair of the boards of the Citigroup Asset Management mutual funds from 2002 to 2005; Portfolio Manager and Managing Director, Smith Barney Asset Management from 1993 to 2001 and President & CEO, Directions Management of Shearson Lehman, Inc. from 1988 to 1993. | | | 17 | | | Cedar Lawn Corporation; New Jersey Chapter of The Nature Conservancy; and Associated Banc-Corp |
| | | |
Debra Perry,# 72 (2011) | | Formerly, Senior Managing Director of Global Ratings and Research, Moody’s Investors Service, Inc. from 2001 to 2004; Chief Administrative Officer, Moody’s, from 1999 to 2001; Chief Credit Officer, Moody’s, from 2000 to 2001; Group Managing Director for the Finance, Securities and Insurance Ratings Groups, Moody’s Corp., from 1996 to 1999; earlier she held executive positions with First Boston Corporation and Chemical Bank. | | | 17 | | | Assurant, Inc., since 2017; Korn/Ferry International since 2008; Genworth Financial, Inc., from 2016-2022; PartnerRe, from 2013-2016; Bank of America Funds Series Trust, from 2011-2016 |
| | | |
Jeffrey R. Holland,# 57 (2019) | | Formerly, Limited Partner of Brown Brothers Harriman from 2014 to 2018. Prior thereto, General Partner of Brown Brothers Harriman from 2006 to 2013. | | | 17 | | | Director of various non-profit organizations |
| | | |
William Kristol,# 70 (1994) | | Founder and Editor, The Weekly Standard from 1995 to 2018. He is a regular contributor on leading political commentary shows. He has served as the inaugural Vann Professor of Ethics in Society at Davidson College since 2019. | | | 17 | | | The Institute for the Study of War; Foundation for Constitutional Government; Defending Democracy Together Institute and Defending Democracy Together (All are non-profit educational corporations) |
| | | | | | | | |
| | |
DIRECTORS’ INFORMATION (continued) | | | |
Name, Address+, Age,
(Year of Election*) | | Principal Occupation(s)
During Past Five (5) Years and Other
Information | | Portfolios in
Fund Complex
Overseen
By Director | | | Other Directorships
Currently Held by Director |
Donald K. Peterson,# 74 (2007) | | Formerly, Chairman and Chief Executive Officer, Avaya Inc. (telecommunications equipment and services) from 2002 to 2006; President and Chief Executive Officer, Avaya Inc. from 2000 to 2001; President, Enterprise Systems Group in 2000; Chief Financial Officer, Lucent Technologies (telecommunications equipment and services) from 1996 to 2000; Chief Financial Officer, AT&T, Communications Services Group from 1995 to 1996; President, Nortel Communications Systems, Inc. (telecommunications and networking equipment) from 1994 to 1995. Prior thereto, he was at Nortel from 1976 to 1995. | | | 17 | | | Worcester Polytechnic Institute (Emeritus); Member of the Board of TIAA-Bank, FSB |
+ The address for each of the Fund’s Disinterested Directors is c/o AllianceBernstein L.P., Attention: Legal and Compliance Department—Mutual Fund Legal, 1345 Avenue of the Americas, New York, NY 10105.
* There is no stated term of office for the Directors.
# Member of the Audit Committee, the Governance, Nominating, and Compensation Committee, and the Independent Directors Committee.
Bernstein Fund, Inc. (continued)
| | | | |
| |
MANAGEMENTOFTHE FUND |
| Name, Address,* and Age | | Principal Position(s)
Held with Fund | | Principal Occupation
During Past Five (5) Years |
Alexander Chaloff, 51 | | President | | Senior Vice President of the Adviser** with which he has been associated since prior to 2018. He is Chief Investment Officer and Head of Investment & Wealth Strategies since April 2023. He previously served as Co-Head of the Investment Strategy Group since 2020. Prior to joining the firm in 2005, he was a managing director at Wilshire Associates, a leading global investment consultant, serving on the firm’s investment committee. |
| | |
Andrew Birse, 45 | | Vice President | | Senior Vice President of the Adviser**, with which he has been associated since prior to 2018. He is also Chief Investment Officer - European Value Equities as of November 2022 and International Small Cap Equities since 2021. |
| | |
Peter Chocian, 51 | | Vice President | | Senior Vice President of the Adviser**, with which he has been associated since prior to 2018. |
| | |
Vivian Chen, 40 | | Vice President | | Senior Vice President of the Adviser**, with which she has been associated since prior to 2018. |
| | |
Samantha S. Lau, 51 | | Vice President | | Senior Vice President of the Adviser**, with which she has been associated since prior to 2018. She is also Chief Investment Officer of Small and SMID Cap Growth Equities. |
| | |
Stuart Rae, 58 | | Vice President | | Senior Vice President and Chief Investment Officer of Asia-Pacific Value Equities of the Adviser,** with which he has been associated since prior to 2018. He is also Chief Investment Officer of Emerging Markets Value Equities since 2023. |
| | |
Erik A. Turenchalk, 50 | | Vice President | | Senior Vice President of the Adviser**, with which he has been associated since prior to 2018. |
| | |
Nelson Yu, 52 | | Vice President | | Senior Vice President of the Adviser**, with which he has been associated since prior to 2018. Chief Investment Officer - Investment Sciences and Insights since 2021 and Head - Blend Strategies since 2018. |
| | | | |
| |
MANAGEMENTOFTHE FUND (continued) |
| Name, Address,* and Age | | Principal Position(s)
Held with Fund | | Principal Occupation
During Past Five (5) Years |
| | |
Nancy E. Hay, 51 | | Secretary | | Senior Vice President and Counsel of the Adviser, with which she has been associated since prior to 2018 and Assistant Secretary of the Retail Distributor**. |
| | |
Michael B. Reyes, 47 | | Senior Vice President | | Vice President of the Adviser**, with which he has been associated since prior to 2018. |
| | |
Stephen M. Woetzel, 52 | | Treasurer and Chief Financial Officer | | Senior Vice President of AllianceBernstein Investor Services, Inc. (“ABIS”)**, with which he has been associated since prior to 2018. |
| | |
Phyllis J. Clarke, 62 | | Controller | | Vice President of ABIS**, with which she has been associated since prior to 2018. |
| | |
Jennifer Friedland, 49 | | Chief Compliance Officer | | Vice President of the Adviser** since 2020 and Mutual Fund Chief Compliance Officer (of all Funds since January 2023 and of the ETF Funds since 2022). Before joining the Adviser** in 2020, she was Chief Compliance Officer at WestEnd Advisors, LLC from prior to 2018 until 2019. |
* The address for each of the Fund’s Officers is 1345 Avenue of the Americas, New York, NY 10105.
** The Adviser, the Retail Distributor and ABIS are affiliates of the Fund.
The Fund’s Statement of Additional Information (“SAI”) has additional information about the Fund’s Directors and Officers and is available without charge upon request. Contact your financial representative or AB at (212) 486-5800, or visit www.bernstein.com, for a free prospectus or SAI.
Operation and Effectiveness of the Portfolios’ Liquidity Risk Management Program:
In October 2016, the Securities and Exchange Commission (“SEC”) adopted the open-end fund liquidity rule (the “Liquidity Rule”). In June 2018 the SEC adopted a requirement that funds disclose information about the operation and effectiveness of their Liquidity Risk Management Program (“LRMP”) in their reports to shareholders.
One of the requirements of the Liquidity Rule is for the Portfolios to designate an Administrator of the Portfolios’ Liquidity Risk Management Program. The Administrator of the Portfolios’ LRMP is AllianceBernstein L.P., the Portfolios’ investment adviser (the “Adviser”). The Adviser has delegated the responsibility to its Liquidity Risk Management Committee (the “Committee”).
Another requirement of the Liquidity Rule is for the Portfolios’ Board of Directors (the “Fund Board”) to receive an annual written report from the Administrator of the LRMP, which addresses the operation of the Portfolios’ LRMP and assesses its adequacy and effectiveness. The Adviser provided the Fund Board with such annual report during the first quarter of 2023, which covered the period January 1, 2022 through December 31, 2022 (the “Program Reporting Period”).
The LRMP’s principal objectives include supporting the Portfolios’ compliance with limits on investments in illiquid assets and mitigating the risk that the Portfolios will be unable to meet their redemption obligations in a timely manner.
Pursuant to the LRMP, the Portfolios classify the liquidity of their portfolio investments into one of the four categories defined by the SEC: Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid. These classifications are reported to the SEC on Form N-PORT.
During the Program Reporting Period, the Committee reviewed whether the Portfolios’ strategy is appropriate for an open-end structure, incorporating any holdings of less liquid and illiquid assets. If the Portfolios participated in derivative transactions, the exposure from such transactions were considered in the LRMP.
The Committee also performed an analysis to determine whether the Portfolios are required to maintain a Highly Liquid Investment Minimum (“HLIM”). The Committee also incorporated the following information when determining the Portfolios’ reasonably anticipated trading size for purposes of liquidity monitoring: historical net redemption activity, a Portfolio’s concentration in an issuer, shareholder concentration, investment performance, total net assets, and distribution channels.
The Adviser informed the Fund Board that the Committee believes the Portfolios’ LRMP is adequately designed, has been implemented as intended, and has operated effectively since its inception. No material exceptions have been noted since the implementation of the LRMP. During the Program Reporting Period, liquidity in all markets was challenged due to rising rates and economic uncertainty. However, markets also remained orderly during the Program Reporting Period. There were no liquidity events that impacted the Portfolios or their ability to timely meet redemptions during the Program Reporting Period.
Board Consideration of Investment Management Arrangement
Bernstein Fund, Inc. (the “Fund”) is subject to Section 15 of the Investment Company Act of 1940, as amended. Section 15 provides that any investment advisory agreement with a registered investment company such as the Fund may continue in effect for a period of more than two years from the date of its execution, only so long as such continuance is specifically approved at least annually by the board of directors (or by vote of a majority of the outstanding voting securities of the investment company). Pursuant to this requirement, the Fund’s Board of Directors, including the Directors who are not interested persons of the Fund (the “Independent Directors”), unanimously approved the continuation of the Investment Management Agreement between the Fund, on behalf of the International Strategic Equities Portfolio, International Small Cap Portfolio, and Small Cap Core Portfolio (each, a “Portfolio” and collectively, the “Portfolios”) of the Fund, and AllianceBernstein L.P. (the “Adviser”)(the “Investment Management Agreement”) at a meeting held on October 25-26, 2023.
The following discussion describes the considerations in connection with the Board’s review of the Investment Management Agreement.
In connection with the annual review of the continuation of the Investment Management Agreement between the Fund and the Adviser, counsel to the Independent Directors sent a letter to the Adviser dated August 15, 2023, that contained a list of information requested by the Independent Directors to conduct their annual review. The Board of Directors, including the Independent Directors, met by video conference and in person and received and evaluated extensive materials relating to the continuation of the Investment Management Agreement from the Adviser. In addition, the Board received materials from the Senior Vice President of the Fund and an independent fee consultant as described below. On September 27, 2023, the Board of Directors held a video conference meeting to discuss its review of the Investment Management Agreement and the materials the Directors had been provided. At that meeting, the Independent Directors met separately with their independent counsel and the Senior Vice President and the independent fee consultant in executive sessions. Following the September 27, 2023 meeting, the Independent Directors, through counsel, requested certain additional information by means of an email from their independent counsel dated October 2, 2023, and the Adviser provided certain additional information by means of a memorandum dated October 11, 2023. On October 13, 2023, the Board of Directors held an executive session via video conference with independent counsel and the Senior Vice President to further discuss the additional materials the Directors had been provided. On October 25-26, 2023, the Board of Directors held an in-person meeting to continue their review of the Investment Management Agreement. During this meeting, the Adviser provided further information requested by the Independent Directors relating to contract renewal, and the Independent Directors also met separately with counsel to the Independent Directors as well as the Senior Vice President to review the contract renewal materials provided by the Adviser and the materials prepared by the Senior Vice President. At the conclusion of this meeting, the Board approved the continuation of the Investment Management Agreement for an additional annual term as described below.
In approving the Investment Management Agreement, the Board, including the Independent Directors, considered all information it deemed reasonably necessary to evaluate the terms of the Investment Management Agreement and considered whether the Agreement would be in the best interests of the Fund. In particular, the Board considered the information that was provided to them by the Adviser in response to their requests, as well as information prepared by the Senior Vice President and the independent fee consultant at the request of the Board. The Fund’s Senior Vice President assists the Board (as well as the boards of other funds sponsored by the Adviser) in evaluating investment management agreements and certain other plans and agreements pursuant to which the Adviser or its affiliates provide services to the Funds. The Board also considered other information provided to the Board in connection with the September 27, 2023 and October 25-26, 2023 meetings and throughout the past year.
The information considered by the Board included information with respect to the nature, extent and quality of services provided, investment performance, fees and expenses, profitability, economies of scale, and fall-out benefits and other revenue.
In the Board’s consideration of the factors discussed below, no single factor was considered in isolation or to be determinative to the decision of the Board to approve the Investment Management Agreement. Rather, the Board concluded, in light of a weighing and balancing of all factors considered and in the exercise of the Directors’ business judgment, that it was in the best interests of the Fund to approve the Investment Management Agreement including the fees to be charged for services thereunder, as summarized below.
Fees and Expenses
The Board, including the Independent Directors, compared the fees and expense ratios of each Portfolio (before and after any fee waivers and expense reimbursements) against fees and expense ratios of a peer group of funds with similar investment objectives (“peer group”). Both the peer group and the funds within the peer group, with respect to the fee and expense data, were available from Strategic Insight, an independent provider of investment company data. The Board noted that each Portfolio’s contractual advisory fee was below the median of the peer group and that each Portfolio’s total expense ratio was below the peer group median in the Strategic Insight report. The Senior Vice President also performed analyses of the advisory fees, and compared such analyses to the Portfolios’ peer groups. In addition, the Board received and considered information from an independent fee consultant regarding the fees and expenses of the Portfolios as well as their investment performance.
The Board also received and considered information about the services rendered, and the fee rates charged, to other clients advised by the Adviser, including information about any recent advisory fee changes with respect to other investment companies advised by the Adviser. The Board noted the differences between the services provided to the Portfolios in comparison to those provided to other types of clients, including institutional clients and other investment companies for which the Adviser acted as investment adviser or subadviser, and the differences in the entrepreneurial and other risks borne by the Adviser in serving the Portfolios compared to other types of clients. In particular, with respect to the International Strategic Equities Portfolio, the Board noted that the Portfolio’s strategy included a greater allocation to emerging markets securities, versus certain other international portfolios managed by the Adviser that did not have a similar allocation to emerging markets securities.
The Board also considered the fee waivers and/or expense caps applicable to the International Small Cap Portfolio and the Small Cap Core Portfolio, and that, at the request of the Board, the Adviser had agreed to institute a fee waiver applicable to the International Strategic Equities Portfolio for one year.
On the basis of its review and consideration of the fees as described above and the Board’s consideration of the other factors described below, and in light of the Adviser’s agreement to fee waivers and/or expense caps applicable to the Portfolios, the Board concluded that the contractual advisory fees as proposed were reasonable.
Nature, Extent and Quality of Services Provided
The Board, including the Independent Directors, considered the nature, quality and extent of services performed by the Adviser and its affiliates gained from their experience as Directors of the Fund, their overall confidence in the Adviser’s integrity and competence they have gained from that experience, and the Adviser’s initiative in identifying and raising potential issues with the Directors. The Board also considered the Adviser’s responsiveness, frankness and attention to concerns raised by the Directors from time to time, including the Adviser’s willingness to consider and implement organizational and other changes designed to improve investment results and the services provided to the Portfolios. The Board also considered the scope and quality of the Adviser’s investment management capabilities, other resources dedicated to performing its services, the quality of its compliance, administrative and other services provided to the Portfolios and the background and experience of the Adviser’s senior management. The Board reviewed the qualifications, backgrounds and responsibilities of the investment staff primarily responsible for day-to-day portfolio management services for each Portfolio and noted the Adviser’s commitment to strong research and investment management capabilities throughout changing market environments. The Board reviewed the compliance and administrative services of the Adviser that support the investment advisory services provided to the Portfolios.
In considering the nature and quality of the services provided by the Adviser, the Board, including the Independent Directors, received and considered information about each Portfolio’s investment performance, as well as the performance of its peer group and the performance of an appropriate benchmark index. The Board was provided with performance data versus each Portfolio’s peer group, for the 1-year, 3-year and 5-year periods ended July 31, 2023 and versus each Portfolio’s benchmark index for the 1-year, 3-year, 5-year and since inception for the relevant periods, as well as the most recently available Morningstar rating for the Portfolios. The Board also received certain updated performance information as of September 30, 2023. In addition, the Directors considered information showing performance compared to peer groups and benchmarks for rolling calendar year periods and the year to date. The Directors also receive detailed comparative performance information for the Portfolios at each regular Board meeting during the year. The Board recognized that the benchmark indices do not account for fees and expenses incurred by a
fund, including the Portfolios. The Directors also considered how peer groups have changed over time and how comparisons may differ depending upon the selection of the peer groups or benchmark indices.
Where the Portfolios had underperformed their peer groups or benchmark indices, the Directors considered the Adviser’s explanations for performance and, as applicable, measures the Adviser had taken or proposed to take to improve performance. In particular, for International Strategic Equities Portfolio, the Board noted that the Adviser had sought to improve performance by appointing an additional portfolio manager, among other things. The Board also noted that the Adviser’s implementation of a fee waiver for the International Strategic Equities Portfolio would help somewhat to improve the net performance of the Portfolio. For the International Small Cap Portfolio, the Board noted that the Portfolio’s recent performance had improved. The Directors noted generally the Adviser’s continued efforts to enhance the services provided to the Portfolios, including enhancements to portfolio management models. The Directors also noted that they would continue to monitor investment performance closely.
The Board concluded that the Adviser had the experience and resources necessary to provide services of appropriate nature, quality and scope with respect to the Portfolios.
Profitability
The Board, including the Independent Directors, considered the level of the Adviser’s profits in respect of its management of the respective Portfolios. The materials provided to the Independent Directors included information indicating the profitability of the Portfolios to the Adviser for calendar years 2021 and 2022. The Directors considered the assessment of an independent consultant that had reviewed the profitability statements for consistency with cost accounting theory and industry standards. The Directors reviewed the assumptions and methods of allocation used by the Adviser in preparing fund-specific profitability data, noting that the methodology was consistent with the Adviser’s internal financial reporting. The Directors acknowledged that there are many potentially acceptable allocation methodologies for cost allocation, and that in certain cases the selected allocation methodology may not capture all costs borne by the Adviser with respect to a Portfolio. The Directors noted that they received information regarding all revenues and expenses of the Adviser’s relationship with the Fund, including those relating to the Adviser’s subsidiaries that provide transfer agency and distribution services to the Fund, and that they had focused on profitability before taxes and distribution expenses. The Directors reviewed comparative information regarding profitability for other publicly-traded advisers, recognizing that it is difficult to make comparisons of profitability among different investment advisers because only limited comparative information is publicly available and the comparisons are affected by numerous factors including different business mixes.
After reviewing all relevant factors, the Directors, including the Independent Directors, concluded that the levels of the Adviser’s profits in respect of its management of the Portfolios were not excessive.
Economies of Scale
The Board, including the Independent Directors, considered whether there have been economies of scale in respect of the management of the Portfolios, whether the Portfolios have appropriately benefited from any economies of scale, and whether there is potential for realization of any further economies of scale. The Directors discussed possible ways in which any such economies of scale may be shared with the Portfolios, including by investment in enhanced services.
The Directors also considered the Senior Vice President materials which they received in connection with the review of the Investment Management Agreement, which included information reflecting changes in asset levels of the Portfolios and in the profitability of the Adviser over various periods.
After reviewing the profitability and economies of scale information provided by the Adviser, the Board concluded that the benefits of any economies of scale were appropriately being shared with Portfolio investors by way of, among other things and as applicable, establishing advisory fees at levels that contemplated future achievement of scale, breakpoint arrangements as currently in effect for the International Strategic Equities Portfolio, the fact that the International Small Cap and Small Cap Core Portfolios are research-intensive and may be capacity-constrained, expense caps and waivers applying to the Portfolios, and the Adviser’s continued reinvestment in the business, including by researching and implementing new product enhancements. The Directors also noted that they would continue to monitor the growth of the Portfolios.
Fall-Out Benefits and Other Revenue
The Board, including the Independent Directors, also took into account so-called “fall-out benefits” to the Adviser, such as soft dollar arrangements (whereby the Adviser receives the benefit of research services from many of the brokers and dealers that execute purchases and sales of securities on behalf of its clients on an agency basis). The Directors recognized that the Adviser’s profitability would be lower without these benefits. They also considered other benefits potentially derived from an increase in the Adviser’s business as a result of its relationship with the Fund. The Directors concluded that these fall-out benefits to the Adviser were acceptable.
Advisory Fee Rate Schedule
On the basis of the information considered, the Board determined to approve the continuation of the Investment Management Agreement for an additional annual term, without change to the Portfolios’ contractual fee schedules, as set forth below.
| | |
| PORTFOLIO | | ANNUAL PERCENTAGE OF AVERAGE
DAILY NET ASSETS OF EACH PORTFOLIO |
| International Strategic Equities | | 0.75% on the first $2.5 billion; 0.65% in excess of $2.5 billion up to, but not exceeding $5 billion; 0.60% of assets in excess of $5 billion. |
| | |
| International Small Cap | | 1.00% of assets. |
| | |
| Small Cap Core | | 0.80% of assets. |
Distributor
BERNSTEIN FUND, INC.
1345 AVENUEOFTHE AMERICAS, NEW YORK, NY 10105
(212) 756-4097
ISCEC-0151-0923
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the registrant’s code of ethics is filed herewith as Exhibit 12(a)(1).
(b) During the period covered by this report, no material amendments were made to the provisions of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics adopted in 2(a) above were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant’s Board of Directors has determined that independent directors Donald K. Peterson, Debra Perry, R. Jay Gerken and Jeffrey R. Holland qualify as audit committee financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) – (c) The following table sets forth the aggregate fees billed by the independent registered public accounting firm Pricewaterhouse Coopers LLP , for the Fund’s last two fiscal years for professional services rendered for: (i) the audit of the Fund’s annual financial statements included in the Fund’s annual report to stockholders; (ii) assurance and related services that are reasonably related to the performance of the audit of the Fund’s financial statements and are not reported under (i), which include advice and education related to accounting and auditing issues, quarterly press release review (for those Funds that issue quarterly press releases), and preferred stock maintenance testing (for those Funds that issue preferred stock); and (iii) tax compliance, tax advice and tax return preparation.
| | | | | | | | | | | | | | | | |
| | | | | | Audit Fees | | | Audit-Related
Fees | | | Tax Fees* | |
Bernstein Fund Inc. Small Cap Core Portfolio | | | 2022 | | | $ | 21,700 | | | $ | 1,926 | | | $ | 22,794 | |
| | | | |
| | | 2023 | | | $ | 22,785 | | | $ | 1,933 | | | $ | 24,794 | |
| | | | |
Bernstein Fund Inc. International Small Cap Portfolio | | | 2022 | | | $ | 25,000 | | | $ | 1,926 | | | $ | 67,793 | |
| | | | |
| | | 2023 | | | $ | 26,250 | | | $ | 1,933 | | | $ | 111,843 | |
| | | | |
Bernstein Fund Inc. International Strategic Equities Portfolio | | | 2022 | | | $ | 30,000 | | | $ | 1,926 | | | $ | 149,558 | |
| | | | |
| | | 2023 | | | $ | 26,250 | | | $ | 1,933 | | | $ | 127,459 | |
| * | Paid to Ernst & Young LLP. |
(d) Not applicable.
(e) (1) Beginning with audit and non-audit service contracts entered into on or after May 6, 2003, the Fund’s Audit Committee policies and procedures require the pre-approval of all audit and non-audit services provided to the Fund by the Fund’s independent registered public accounting firm. The Fund’s Audit Committee policies and procedures also require pre-approval of all audit and non-audit services provided to the Adviser and Service Affiliates to the extent that these services are directly related to the operations or financial reporting of the Fund.
(e) (2) 100% of the amounts for Audit-Related Fees and Tax Fees in the table under Item 4 (b) and (c) are for services pre-approved by the Fund’s Audit Committee. No amounts are reported for Item 4 (d).
(f) Not applicable.
(g) The following table sets forth the aggregate non-audit services provided to the Fund, the Fund’s Adviser and entities that control, are controlled by or under common control with the Adviser that provide ongoing services to the Fund:
| | | | | | | | | | | | |
| | | | | | All Fees for Non-Audit Services Provided to the Portfolio, the Adviser and Service Affiliates | | | Total Amount of
Foregoing Column Pre-
approved by the Audit
Committee
(Portion Comprised of
Audit Related Fees)
(Portion Comprised of
Tax Fees) | |
Bernstein Fund Inc. Small Cap Core Portfolio | | | 2022 | | | $ | 5,874,283 | | | $ | 24,720 | |
| | | | | | | | | | $ | (1,926 | ) |
| | | | | | | | | | $ | (22,794 | ) |
| | | |
| | | 2023 | | | $ | 5,896,623 | | | $ | 26,727 | |
| | | | | | | | | | $ | (1,933 | ) |
| | | | | | | | | | $ | (24,794 | ) |
| | | |
Bernstein Fund Inc. International Small Cap Portfolio | | | 2022 | | | $ | 5,919,282 | | | $ | 69,719 | |
| | | | | | | | | | $ | (1,926 | ) |
| | | | | | | | | | $ | (67,793 | ) |
| | | |
| | | 2023 | | | $ | 5,983,672 | | | $ | 113,776 | |
| | | | | | | | | | $ | (1,933 | ) |
| | | | | | | | | | $ | (111,843 | ) |
| | | |
Bernstein Fund Inc. International Strategic Equities Portfolio | | | 2022 | | | $ | 6,001,047 | | | $ | 151,484 | |
| | | | | | | | | | $ | (1,926 | ) |
| | | | | | | | | | $ | (149,558 | ) |
| | | |
| | | 2023 | | | $ | 5,999,288 | | | $ | 129,392 | |
| | | | | | | | | | $ | (1,933 | ) |
| | | | | | | | | | $ | (127,459 | ) |
(h) The Audit Committee of the Fund has considered whether the provision of any non-audit services not pre-approved by the Audit Committee provided by the Fund’s independent registered public accounting firm to the Adviser and Service Affiliates is compatible with maintaining the auditor’s independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. INVESTMENTS.
Please see Schedule of Investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Directors since the Fund last provided disclosure in response to this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
(b) There were no changes in the registrant’s internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 13. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| (Registrant): Bernstein Fund, Inc. |
| |
| By: | | /s/ Alex Chaloff |
| | Alex Chaloff |
| | President |
Date: November 29, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| By: | | /s/ Alex Chaloff |
| | Alex Chaloff |
| | President |
Date: November 29, 2023
| | |
| By: | | /s/ Stephen M. Woetzel |
| | Stephen M. Woetzel |
| | Treasurer and Chief Financial Officer |
Date: November 29, 2023
